USD/JPY Forecast – US Dollar Continues to Rally

USD/JPY Forecast Video for 09.08.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar rallied a bit during the trading session on Tuesday, as we broke above the ¥142.50 level, reaching toward the ¥143.50 level. That being said, we are at the top of a short-term consolidation area, so we could pull back a bit at this point. I still look at that as a potential buying opportunity though, due to the fact that the market is paying you to sit on this currency pair, as a positive swap certainly is something that matters over the longer term.

Short-term pullbacks at this point continue to see a lot of support near the ¥141.75 level, and then of course the 50-Day EMA that sits below and is rising. That is an area that a lot of people will be paying close attention to, and then below there we have the ¥138 level, which is an area that previously has been a major resistance level, so it should now be a major support level. All things being equal, this is a market that is not one that I could sell until we break down below that level, something that I just don’t see that happening anytime soon. With this being the case, you should also pay close attention to the fact that the 200-Day EMA is right around that area.

All of that being said, it’s very unlikely that this market pulls back, at least for anything that is significant. And it’s even more unlikely that this market sells off. The ¥145 level is an area where we could pay close attention to, as the market has seen quite a bit of resistance there, so if we were to break above that level, then it almost certainly would open up the possibility of fairly big move to the outside. In that environment, I would anticipate that the market is looking to the ¥150 level, which is my longer-term target.

The Bank of Japan continues to offer quite a bit of quantitative easing, and that of course works against the value of the Japanese yen, which is essentially what you are seeing on this chart. The US dollar has been strong during the trading session, so it all plays out perfectly on this chart.

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