USD/JPY Forecast – US Dollar Pulled Back Against Yen

USD/JPY Forecast Video for 25.07.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has pulled back a bit during the trading session on Monday, as we continue to see a lot of noisy behavior. Nonetheless, this is a market that I still believe goes higher over the longer-term, especially with the 50-Day EMA offering support underneath, which is currently right around the ¥140.25 level. The massive move on Friday of course was rather impressive, but at this point I think we have to look at it through the prism of a market that also got a little overheated.

To the upside, the ¥142.50 level is an area that a lot of people will be paying attention to, and if we can break above there, then it’s likely that we could go to the 145 young level. In general, I do think that is your target given the next couple of weeks, and I do think that occasionally we will see a lot of noisy behavior. Breaking down below the 50-Day EMA then opens up the possibility of a move down to the ¥138 level yet again. Remember, we recently pulled back to test that area, and then bounced hard to the upside. The ¥138 level is an area that has been important a couple of times in the past, due to the fact that the level is the top of the previous ascending triangle, and will attract a lot of attention as such. Furthermore, we also have the 200-Day EMA racing toward that area, so from a technical analysis standpoint, it makes sense that people will be trading to the upside if we do pull back to that level.

All things being equal, you also have to keep in mind that the Federal Reserve is much more hawkish than the Bank of Japan, and of course as long as the Japanese stay so loose with their quantitative easing, it’s difficult for the Japanese yen to pick up a full head of steam and really start to take off against other currencies. As a result, the uptrend should continue over the longer-term, but it doesn’t necessarily mean that it’s going to happen easily or quickly at this point.

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