USD/JPY Forecast – US Dollar Continues to Probe Higher Against the Japanese Yen

USD/JPY Forecast Video for 22.06.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar rallied a bit during the trading session on Wednesday as we continue to see upward pressure. All things being equal, the market is trying to get to the ¥142.50 level, an area that was a previous swing high. Because of this, the market looks as if it is trying to build up enough momentum to make a bigger move, perhaps finally breaking through a lot of resistance and going much higher. When you look at the overall market picture, the bullish flag that was recently broken measures for a potential move to the ¥148 level, perhaps even higher than that. Furthermore, we also had an ascending triangle previously that measured for something similar.

Looking at this chart, we also had that ascending triangle shows a lot of resistance at the ¥138 level, which due to “market memory,” could offer a lot of support as it was so resistive previously. With that being the case, I think it also is interesting that it lines up as the bottom of the bullish flag, so it does suggest that we have a lot of support in that area just waiting to come into the market if necessary. Because of this, if we were to break down below that level, then I think it opens up a massive amount of selling. This would also make sense because the 50-Day EMA is hanging around as well.

In general, this is a market that I think still looks higher, and therefore I am a buyer of dips. I do believe that longer term you will be rewarded with a bigger move, and of course you get paid a positive swap, depending on your broker, for holding onto it. The Bank of Japan has recently reiterated its desire to stay loose for longer, therefore I think this all lines up in a one way trade. After all, even at the Federal Reserve doesn’t raise interest rates next meeting, the interest rate differential is still wide enough to drive a truck through, and I think that is going to be the biggest driver of this market going forward.

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