USD/JPY Forecast – US Dollar Continues to See Strength

Christopher Lewis
Published: Apr 25, 2024, 14:55 GMT+00:00

The US Dollar has rallied significantly to show signs of continuation against the lowly Japanese yen. However, there is a Bank of Japan meeting in the early hours on Friday that could cause headaches.

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US Dollar vs Japanese Yen Technical Analysis

The US dollar rallied a bit during the early hours on Thursday, but then gave back gains as GDP came out much cooler than anticipated. That being said, this is a market that continues to see upward trajectory due to the interest rate differential, but it’s also worth noting that the Bank of Japan has a meeting that will take front and center stage here in the next 24 hours, so it’ll be interesting to see what they do to try to calm the markets down.

After all, the Japanese yen has been crushed for quite some time, and I think you’ve got a situation where it’s just it’s impossible to short this pair. Now, you could get out of it trying to protect yourself from the headline risk, that certainly could be a play, but right now you are either long in this market or you’re on the sidelines, and there’s no other way around.

The ¥155 level should be support. But quite frankly, if we pull back at this point, I think you’ve got a scenario where it just offers value. On the other hand, if the Bank of Japan chooses to do very little or even nothing that could send this market into the stratosphere, it’ll be interesting to see how that plays out, but expect a lot of volatility over the next 24 hours. But we should get a lot of answers to a lot of questions early on Friday. And the way we close at the end of the week certainly will come to the attention of traders as well.

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

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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