USD/JPY Forecast – US Dollar Continues to Power Higher Against Yet

USD/JPY Forecast Video for 02.08.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied significantly during the session on Tuesday, as we continue to see a lot of bullish pressure. All things being equal, it looks like the US dollar is starting to pick up strength around the world, and I do think that continues to be the case going forward. With this, the market then looks as if it is going to go looking to the ¥145 level. After all, the Bank of Japan recently chirped the market away from shorting the yen, only to turn around and start buying bonds again. In other words, the Bank of Japan blinked as soon as the market pressed the issue.

This tells me that the Japanese yen has much further to fall, and we will more likely than not continue to see the market rates higher, especially as the Federal Reserve is going to remain “tighter for longer.” In general, this is a situation where pullbacks will offer buying opportunities, and the 50-Day EMA comes into the picture as support near the ¥140.50 level. This is assuming that we can pull back, but I really don’t think that happens anytime soon as the Federal Reserve will more likely than not be forced to stay tight.

Pay attention to the fact that Friday is Non-Farm Payroll Friday, as a better than anticipated jobs number will send this market straight up in the air. Yes, we are a little bit overbought at this point, but I think given enough time we will probably see buyers come in to pick up this market, and therefore I’m looking at every dip as a potential buying opportunity, but quite frankly that’s how this market has been for a while. With that being said, I have no interest in shorting this market, and quite frankly I think that we probably go looking toward the ¥150 level over the next several months. This obviously will move in different phases, so look for value and take advantage of it. Please, do not chase this trade as it’s a great way to lose money. The volatility in the Japanese yen is well known.

For a look at all of today’s economic events, check out our economic calendar.