USD/JPY Forecast – US Dollar Continues to Rally Against Japanese Foe

USD/JPY Forecast Video for 19-02-2024

US Dollar vs Japanese Yen Technical Analysis

The US dollar rallied a bit during the early hours on Friday, bouncing from the crucial 149.80 yen level, an area that has been important multiple times. It now looks as if the market is ready to continue going higher and will use this area as a bit of a stepping stone due to market memory.

In this environment, it does make a certain amount of sense, considering the interest rates in the United States are much higher than they are in Japan, so traders are getting paid to hang on to this pair. Short-term pullbacks continue to offer buying opportunities from everything I see, and therefore you have to treat it as such. The 50-day EMA currently sits right around the 147.33 yen level and is rising. This was also an area of interest, so I think there are multiple support levels underneath that are going to continue to support the US dollar against the Japanese currency.

Keep in mind that the Bank of Japan is nowhere near tightening monetary policy because quite frankly the debt that Japan carries is far too heavy for higher interest rates. With that being the case, I think the Japanese yen is a currency you continue to sell not only against the US dollar but multiple other currencies as well. Because of this, I just don’t see an argument for shorting this pair or anything else that is denominated in Japanese yen at the moment.

The 200 day EMA is all the way down at the 145 yen level. So, it would take a rather significant sell off of 500 pips or more to even test that long-term trend defining indicator. Above we have the 152 yen level that offers significant resistance. If we can break that, it opens up the possibility of going to the 155 yen level over the longer term, which I do think is a very distinct possibility at this point in time. After that, we just continue to follow the longer-term trend as the top is yet to be known in this market.

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