USD/JPY Forecast – US Dollar Continues to Punish The Japanese Yen

Christopher Lewis
Updated: Jun 20, 2024, 15:41 GMT+00:00

The US dollar continues to see a lot of upwards pressure against the Japanese yen. This is a market that I think will continue to see a lot of noisy behavior, but at the end of the day, this is a pair that pays you to own it over the longer-term.

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US Dollar vs Japanese Yen Technical Analysis

The U.S. Dollar initially pulled back just a bit against the Japanese Yen in the early hours of Thursday, but it continues to climb higher as we are extraordinarily bullish. Keep in mind that the interest rate differential between the United States and Japan continues to be wide enough to drive a truck through, and as long as that’s going to be the case, it makes a lot of sense that the US dollar continues to climb. The short-term pullback, when it does come, typically offers a buying opportunity that people are willing to jump on because they get paid at the end of every day and quite significantly to hold this pair.

The Federal Reserve is nowhere near cutting interest rates and now there’s even thoughts that maybe they won’t at all this year. And if that’s going to be the case, then we will just continue to see this market go higher. The Bank of Japan did intervene just above current levels, but really at this point, it looks like it’s a foregone conclusion that we will eventually reach the 160 yen level and then take that barrier out.

This is a market that over the longer term will continue to be very noisy. Um, but I think there’s so much in the way of support underneath. You just simply cannot go in the other direction. The 50 day EMA sits right around the 155.50 level with the 155 level underneath the hard floor. If you squint, you can see an ascending triangle. And I think we go much higher.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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