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

USD/JPY Forecast Video for 09.12.22

US Dollar vs Japanese Yen Technical Analysis

The US dollar has gone back and forth during the trading session on Thursday, as we continue to see a little bit of resistance above at the ¥137.50 level. Pullbacks at this point should see plenty of support, especially near the 200-Day EMA, and the ¥135 level. Ultimately, this is a situation where I think the market is trying to save its own trend, so it makes a certain amount of sense of things could be noisy.

One thing that you need to keep an eye on when it comes to this pair is the interest rate situation continues to be a lot of pressure on the market. Keep in mind that the Bank of Japan is trying to keep interest rates low, so if interest rates in the global bond markets continue to rise, that means they have to print more Japanese yen in order to buy more bonds. In other words, the global interest rate markets will dictate where the Japanese yen goes. At the same time, if interest rates in America rise, then it makes quite a bit of sense of the US dollar does as well. The shooting star from the Wednesday session being broken to the upside would be a strong sign that we are going to see a lot of buying pressure.

On the other hand, if we break down below the lows of last week, it could send this market down to the ¥132.50 level, possibly even the ¥130 level after that. Ultimately, this is a market that I think will continue to see a lot of volatility, and we are most certainly in an area where things are going to get worse, not better in that regard.

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