USD/JPY Forecast – US Dollar Finding Buyers Against the Yen

USD/JPY Forecast Video for 01.06.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has initially fallen a bit against the Japanese yen during the trading session on Wednesday, as we have seen a lot of upward pressure, and therefore a pullback was desperately needed. Ultimately, this is a market that I think we will continue to see upward pressure over the long term, but obviously markets can’t go in one direction forever.

If we were to break down below the bottom of the candlestick for the Wednesday candlestick, then we could go down to the ¥138 level, which is the top of the ascending triangle that we had been in, so therefore it will have a lot of “market memory” coming into the picture at that particular level. This assumes of course that we are going to get down to that level. On the upside, the ¥140 level has a certain amount of psychology attached to it, and we did pullback from there last time. Because of this, it’s likely that we could see a little bit of hesitation, but once we break above there, I think that the US dollar will continue to go much higher, perhaps reaching toward the ¥148 level, based on the measured move. Underneath, even if we were to break down below the ¥138 level, it’s likely that the 50-Day EMA could come into the picture and offer plenty of support anyway.

Keep in mind that the Bank of Japan continues its ultra-loose policy, while the Federal Reserve looks to be tight for quite some time. As long as that’s going to be the case, it makes quite a bit of sense that we would continue to see more upward momentum, and therefore I don’t have any interest in trying to short this market. I think given enough time, we will fulfill the move to the ¥148 level, which of course is the “measured move” of that triangle. Ultimately, this is a situation where we have a lot of questions when it comes to the global economy, but the Federal Reserve has been steadfast in its desire to remain tight with its monetary policy, perhaps even getting tighter here in the near future.

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