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

USD/JPY Forecast Video for 14.08.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar initially pulled back just a bit during the trading session on Friday, but then turned around to show signs of life again as we continue to reach toward the ¥145 level. The ¥145 level is a large, round, psychologically significant figure that a lot of people pay close attention to. If we can break above there, then the market continues to go much higher, perhaps reaching the ¥147.50 level. The ¥147.50 level is an area that I think attracts a certain amount of attention, but at this point in time I don’t see it as anything more important than any other level on the way to the ¥150 level, perhaps even higher than that.

A pullback from here opens up the possibility of picking up momentum even more so, as the Bank of Japan continues to do everything it can to work against interest rates. In other words, they are making the Japanese yen very unattractive with their quantitative easing. Furthermore, the US dollar itself has strengthened a bit during the session, so this all ties together for a move higher. Underneath, the ¥142.50 level should offer support, so pay close attention to that level if we do pullback. All things being equal, I have no interest in shorting this pair, as I don’t want to own the Japanese yen. Ultimately, this is a market that I think continues offer value from time to time, and that’s something that you should pay close attention to.

We have recently been a little overextended so that pullback should end up being a nice opportunity. At this point, the 50-Day EMA is near ¥141.50 and rising. Ultimately, this is a market that has “one-way fundamentals”, right along with the technical analysis. This does not necessarily mean that we have to break out right away, but rather we could probably have a situation where we have to work up the necessary momentum. That being said, a little bit of patience probably goes a long way in this pair, as it clearly has a lot of momentum building up.

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