USD/JPY Forecast – US Dollar Looking to Break Out Against the Japanese Yen

USD/JPY Forecast Video for 18.09.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the course of the trading session on Friday, as it looks like we are threatening the ¥147.80 level, which is a significant barrier. If we can break above there, then the market is likely to go looking toward the ¥150 level. Short-term pullbacks at this point in time continue to offer buying opportunities as the interest rate differential continues to favor the United States. The Bank of Japan is still loose with its monetary policy, I just don’t see how that changes anytime soon. In fact, the bond market is continuing to see rates rise in the short end of the curve, and therefore it makes a lot of sense that we continue to see traders hang on to this as they get paid to hold onto it.

Short-term pullbacks continue to offer buying opportunities, and I do not have a situation where I am looking to sell this pair. At this point, I like finding value on dips, and will take advantage of cheap US dollars as they occur. In fact, it would not surprise me at all to get long of this market, and therefore I think you’ve got a situation where we not only try to get to the ¥150 level, but there are some indications that we may go closer to ¥155 at this point.

Don’t get me wrong, this is going to be a very noisy market overall, and there is the possibility of a short-term pullback. However, that short-term pullback is more likely than not going to only offer value that people are willing to step in and pick up. Yes, there are a lot of narratives as to what the Bank of Japan may or may not do, but at the end of the day you pay attention to what they do, and not what they say. Ultimately, breaking above the ¥147.80 region is a very bullish sign, and could kick off more FOMO trading as people continue to chase performance. For what it is worth, recently I’ve seen a couple of charts showing that the average retail trader is short of this pair, which is almost always a bullish sign.

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