USD/JPY Forecast – US Dollar Continues to Stabilize

USD/JPY Forecast Video for 23.12.22

US Dollar vs Japanese Yen Technical Analysis

The US dollar has initially dipped during the trading session on Thursday but turned around to show signs of life again. By doing so, it looks as if the market is trying to stabilize, and that does make quite a bit of sense as we are heading into the holiday hours. Ultimately, the next couple of days will be difficult, and then we have to worry about New Year’s as well. Because of this, I think it makes a lot of sense that we do very little.

That being said, there may be more to this. The Bank of Japan has a policy now of allowing the 10-year yield to rise as high as 0.5%, but it is worth noting that the market almost immediately went to 0.47%, suggesting that we may have seen most of this priced in almost immediately. The question now is whether or not the Bank of Japan is going to stick with their statement, or if they are just bluffing. We should know rather soon, but in the short term it does make a certain amount of sense that we would probably try to figure things out.

Furthermore, keep in mind that the Tuesday candlestick represented a 5% drop, which is not normal for the currency markets. In other words, it does make a certain amount of sense that we would have to see some stabilization before more money is willing to pour into the market. Furthermore, the time of year means that liquidity will be missing, so you have to keep in mind that if there is some type of shock, that could really send the markets reeling. In other words, you are going to have to be very cautious.

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