USD/JPY Forecast – US Dollar Continues to Stabilize

USD/JPY Forecast Video for 27-12-2023

US Dollar vs Japanese Yen Technical Analysis

The US dollar has gone back and forth in a rather quiet session on Tuesday, as we continue to try to stabilize against the Japanese yen. After all, the market has sold off quite drastically, and now we are starting to test a significant amount of support underneath. After all, the uptrend line is still holding strong, and of course we have seen the ¥142 level be an area of interest.

Recently, we have seen this market fall rather precipitously as interest rates have been falling in the US bond markets, and that of course has the US dollar looking a lot less attractive. That being said, the Bank of Japan is nowhere near tightening policy, and they reaffirmed that recently, so now we have a fight between 2 lightweights. As long as that’s going to be the case, you probably need to keep your exposure to this pair to a minimum. That being said, if we were to break down below the ¥141 level, then it’s possible that the US dollar is going to continue to go much lower. On the other hand, if we turn around and break above the 200-Day EMA, then the market is likely to go look into the ¥145 level.

In general, I think we are still trying to determine whether we are in a longer-term uptrend or if we are going to break down. That being said, this is a situation where the market is going to continue to see a lot of choppiness, and therefore you need to keep in mind that the market is one that is going to be difficult to get overly large in, but sooner or later we will have to break out of this tight range that we are in, and that is probably a move that you can start to follow. Until then, it’s probably more or less going to be holiday trading which also brings in the idea of ambivalence, therefore we may not see a lot over the next couple of days that inspires traders to get involved, barring some type of headlines across the wires.

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