USD/JPY Forecast – US Dollar Gets Pummeled Against the Yen

USD/JPY Forecast Video for 10.07.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has gotten pummeled during the trading session on Friday, as the dollar dropped down below the ¥142.50 level. This is an area that has been important in the past, and therefore I think it makes quite a bit of sense that we would see a little bit of a pushback in this area. That being said, the candlestick is very long, and I think it’s probably only a matter time before we see a little bit of follow-through.

Having said that, I also recognize that the market is still very much in an uptrend, and therefore a don’t want to get too cute with this, as we are in an uptrend for a reason, not the least of which of course is going to be the Bank of Japan and its monetary policy. The monetary policy is extraordinarily loose, and therefore the Japanese yen continues to get hammered. However, during the Friday session it suggests that the market will continue to see a lot of noisy behavior. After all, we had gotten a little overdone in the short term, but ultimately I think that this is more or less just going to be a short-term reaction to the jobs number.

The Non-Farm Payroll announcement came out at 209,000 jobs added for the previous month, well under the anticipated 225,000. Furthermore, the previous month has been revised lower, so traders are starting to perhaps bet on the idea that the Federal Reserve may not be as tight as they will have to worry about the global economy slowing down. I think that’s a bit of a stretch at this point, and therefore it’s probably only a matter of time before the market turns around.

With that being the case, I like the idea of looking for some type of support and move to the upside to get involved again. I have no interest in shorting this market, and it’s probably worth noting that the 50-Day EMA sits right around the ¥140 level, which is also near the top of the bullish flag sitting underneath. It’s only a matter of time before I get long again, but I need to see some stability first.

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