USD/JPY Forecast – US Dollar Continues to Power Higher

USD/JPY Forecast Video for 14.11.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied again against the Japanese yen on Monday, as we continue to see upward pressure. All things being equal, this is a market that I think continues to see buyers on each dip, as the market will continue to see a lot of traders taking advantage of the interest rate differential and get paid at the end of each day via the swap. All things being equal, the Japanese have no real ability to tighten monetary policy anytime soon, and that is going to continue to be the story here.

Underneath, I see the ¥150 level as an area that will continue to be significant, as it is a large, round, psychologically significant figure, and of course an area where we had seen quite a bit of action previously. Underneath there, we have the 50-Day EMA that should offer a significant amount of support as well. Because of this, I think it’s only a matter of time before we get buyers coming into the market on value, and therefore a “buy on the dips” strategy continues to be the way I play this market. In fact, it’s not until we break down below the ¥147.80 level that I would be concerned about the trend, and even then I would have to take a look at the fundamentals before putting money to work to the downside.

On the upside, if we do clear the ¥152 level, that would open up a move to the ¥155 level over the longer term. After that, I do believe that the pair will just continue to grind higher over the longer term. In fact, the only thing that could change this trajectory would be if one of the central banks change their divergent monetary policies. Because the Bank of Japan has far too much debt to deal with in order to raise rates, it’s more likely that this pair will hinge on whenever the Federal Reserve decides to stop tightening monetary policy, something that they seem hesitant to do at the moment. With that, I remain bullish and see absolutely no reason whatsoever for this pair to drop significantly anytime soon.

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