USD/JPY Forecast – US Dollar Continues to Stabilize Against the Japanese Currency

USD/JPY Forecast Video for 26.12.22

US Dollar vs Japanese Yen Technical Analysis

The US dollar has solidified itself a bit during trading on Friday to reiterate the idea that it is trying to find a bottom against the Japanese yen. Remember, the Bank of Japan decided to broaden the range of trading that it would accept the 10 year yield to bounce around in, allowing it to go from a max of 25 basis points to a max of 50 basis points. However, we have just about seen that hit, so it does make a certain amount of sense that perhaps the worst of the selling is done.

At this point, the 200-Day EMA above, sitting right around the ¥135 level, is more likely than not going to be your target. If we can break above there, then we will threaten the top of that massive candlestick from earlier in the week, which of course break it above there would be a huge positive for this market. I don’t know if we do that, but it is most certainly an obvious signal.

On the other hand, if we managed to break down below the bottom of the candlestick for the trading session on Tuesday, then it could send this market plowing into the ¥130 level, maybe even lower than that. However, keep in mind that we are focusing on the week between Christmas and New Year’s Day, meaning that there will probably be a severe lack of interest in the markets, so the most likely of outcomes will be that we just bounce around aimlessly and wait for some type of catalyst, or traders to come back from the holidays.

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