USD/JPY Forecast – US Dollar Explodes Higher Against the Japanese Yen

USD/JPY Forecast Video for 01.05.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has had a very strong day against the Japanese yen on Friday, as it looks like we have finally broken through the ¥135 resistance barrier, and it’s likely that we continue to go much higher eventually. That being said, I recognize that there is a lot of resistance above, especially near the ¥137.50 level. That’s an area where we had pulled back from previously, and it certainly looks as if we are going to try to get to that level. If we can break above there, then it’s likely that we could enter more of a “buy-and-hold” type of situation.

A short-term pullback from here does make a certain amount of sense, and I look at that as a buying opportunity in a market that is trying to take off to the upside. The 200-Day EMA indicator is at the bottom of the candlestick, and that does suggest that we are going to continue to see plenty of buyers on the dips, therefore I think it’s only a matter of time before we go much higher. Furthermore, you can look at this and make out a bit of a double bottom at multiple points, and therefore it makes quite a bit of sense that we would see plenty of buyers on the dips, and of course we have to keep in mind that the Bank of Japan still has reiterated its yield control policy, which was of course restated last night.

In that scenario, the market will continue to work against the Japanese yen, especially as the Bank of Japan will be printing more Japanese in order to buy bonds, which will drive down the interest rate. Ultimately, I look at this as a “buy on the dip” type of situation, and this candlestick is a major victory for the bulls, and I do believe that this market will eventually find itself into a “buy-and-hold” type of situation. In that scenario, we could go all the way back to the ¥150 level above. On the other hand, if we were to break down from here it’s not until we drop below ¥130 that I would even remotely consider shorting this pair.

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