USD/JPY Forecast – US Dollar Finally Breaks through Resistance

USD/JPY Forecast Video for 27.10.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar broke during the trading session on Thursday, as we are now above the ¥150 level. The ¥150 level is a large, round, psychologically significant figure that a lot of people will be paying attention to as it has been so resistive, but the question now is whether or not the market can continue to go higher. I do think that we will eventually get to the ¥152 level, but it is very difficult to continue going in this direction over the longer term.

At this point in time, we need to pay close attention to the ¥150 level, because it should now offer support based on “market memory.” The market staying above there is crucial to see whether or not we could continue to go to the ¥152 level. The ¥152 level being broken to the upside allows the market to go looking to the ¥155 level, and beyond. In general, this is a market that I think will continue to look at the interest rate differential and favor the US dollar overall.

After all, the market will pay you to hang on to this currency pair, and therefore I think you need to look at this through the prism of finding value on dips, as the US dollar is still the favored currency to own, so even though the Bank of Japan recently has tried to jawbone this pair down, the reality is they also stepped into the bond markets to drive yields down. Ultimately, the Bank of Japan has to either allow for higher interest rates, allowing the currency to strengthen, or they will continue to fight interest rates, and continue to see a lot of weakness in the currency.

When you look at this chart, it’s obvious that we are in an uptrend, and therefore you need to look at it through that prism. The 50-Day EMA sits around the ¥147.80 level, and therefore it is a “rising floor” in the market. All things being equal, this is a market that will continue to see plenty of pressure to the upside, but eventually we should continue to go higher, but that doesn’t necessarily mean that it’s going to be easy.

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