USD/JPY Forecast – US Dollar Dips But Finds Buyers Against Japanese Yen

USD/JPY Forecast Video for 11.09.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar initially plunged during the trading session on Friday, reaching down to the ¥145 level, before turning around and showing signs of life. By forming the candlestick that we have, it suggests that the market is going to continue to go to the upside. If we can break above the recent ¥148 level, then it’s likely that the market could go looking toward the ¥150 level. All things being equal, the market continues to be a “buy on the dip” scenario, and with that being said, the market is likely to see a lot of volatility, but with the interest rate differential between the United States and Japan being wide enough to drive a truck through, it’s likely that the pair continues to go higher.

If we do break down from here, the 50-Day EMA sits right around the ¥144 level, which is starting to reach toward the ¥145 level. The ¥145 level is the bottom of a consolidation area that we had previously been in the past. All things being equal, it looks as if we are going to try to get to the ¥150 level, which is a large, round, psychologically significant figure, and an area where we have seen some action in the past. One would have to think that there would be a lot of options barriers there as well, so it does make sense that we would go looking to get there.

It is not until the Bank of Japan changes its overall attitude that this pair will change its trajectory. Yes, there has been some whining by the Bank of Japan recently about the undesirable FX moves, but at the end of the day it’s not until they change their monetary policy that the markets will change their attitude. They get to either have low interest rates and a very weak Japanese yen, or freely exchanged interest rates and a strengthened Japanese yen. All things being equal, this is a market that should have plenty of runway to the upside, but it doesn’t necessarily mean that it has to go straight up in the air.

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