USD/JPY Forecast – US Dollar Continues to Look to the Upside Against Yen

USD/JPY Forecast Video for 24.08.23

US Dollar vs Japanese Yen Technical Analysis

On Wednesday’s trading day, the US dollar started off with a dip, but then it turned around and showed some signs of life. All in all, I’m thinking the market’s looking at the ¥145 level as a possible support point, even though it used to be a big resistance hurdle. Also, we can’t ignore the psychology around that ¥145—it’s got quite an impact.

Underneath that, the ¥142.50 level has seen its share of action before. Plus, you’ve got the 50-Day Exponential Moving Average right around there. That could be the market’s base, especially if we look at the bigger uptrend. But keep in mind, the next couple of days might be kind of quiet, as everyone’s waiting for Jerome Powell’s talk on Friday at the Jackson Hole Symposium. Right now, most traders are trying to figure out whether the Federal Reserve will stick to its tight policy or not.

At this point, the focus might shift to spotting opportunities when the price goes down a bit, especially since the Bank of Japan is still keeping things super loose with their money policy. In this situation, I’m guessing the market might see the ¥147.50 level as a possible goal. If we manage to get past that, the next target could be hitting ¥150. But remember, this market’s got a lot of noise ahead. The speech on Friday might be the next big thing to shake things up. So, we might just move back and forth until then—unless some traders try to get ahead of the Fed and the speech, which sometimes happens. But often, that’s not the right call. Sometimes the markets are driven by hope, like in this case, hoping for cheap money from the Fed.

Just looking at the difference in interest rates gives some pretty good reasons for the US dollar to stay strong against the Japanese yen. But it’s not only the US dollar—it could have an impact on other currencies too, like the British pound, Australian dollar, New Zealand dollar, Canadian dollar, and more. Remember, this is a relative agreement. The Japanese yen might just keep being not so strong against various other global currencies. So, one thing I’m pretty sure about is that I won’t be buying the Japanese yen against anything any time soon. The current trend backs up this idea, making the yen likely to be on the receiving end of advances from other currencies.

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