USD/JPY Forecast – US Dollar Gives Up Early Gain

USD/JPY Forecast Video for 11.07.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar initially tried to rally during the trading session on Monday, but then gave back the gains rather quickly. At this point, it looks like we are ready to pull back a bit, so therefore it’s possible that we could see a bit of value hunting on some type of dip. Underneath, the 50-Day EMA underneath could offer a bit of support, just below the ¥141 level. The bullish flag is also right around that same area, so I think it makes a certain amount of sense that we would see buyers in that general vicinity.

Speaking of the bullish flag, the market is likely to continue to go higher based on that measured move, but we also need to see some type of fundamental reason for this market to turn back around. The Federal Reserve is almost certainly going to continue to tighten monetary policy, but there are questions as to whether or not they can do so for a longer amount of time.

The market breaking above the top of the candlestick for Monday opens up the possibility of a move toward the ¥145 level. That of course is a large, round, psychologically significant figure, and will cause a little bit of resistance, but if we can break above there that is likely that we could go to the ¥150 level. All that being said, if we were to break down below the 50-Day EMA, it opens up the possibility of a move down to the top of the ascending triangle at the ¥138 level. Anything below there would be a major trend change, but right now I don’t see that happening unless of course the Federal Reserve specifically states that it is going to change its stance.

Ultimately, I do think that eventually this market will recover, but I would like to see some type of bounce or supportive candlestick to get involved. With this, I like the idea of waiting for some type of short-term bounce that I can take advantage of, as this market will almost certainly continue to be bullish as the interest-rate differential gets traders paid for holding on to this currency pair.

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