USD/JPY Forecast – US Dollar Pulls Back

USD/JPY Forecast Video for 23.02.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has pulled back just a bit during the trading session on Wednesday, as the ¥135 level continues to offer a little bit of noise. Looking at the chart, it’s easy to see that the ¥135 level has been important in a couple of times, from both resistance and support. At this point, the market is likely to continue to see the ¥135 level offer noise, so as we ran towards the ¥135 level, it should not be a huge surprise to see that the sellers came back. That being said, the market is likely to continue to see that area cause some issues, but ultimately, I do believe that we break out.

Breaking out above there, it’s likely that we go to the ¥137.560 level, which is where we had seen a lot of selling pressure from previously. Breaking above there then opens up the possibility of going to the ¥140 level. Furthermore, it’s worth noting that we ended up bouncing from the ¥127.50 level underneath, which happens to be where the 50% Fibonacci level was from last year’s major move to the upside. The 200-Day EMA sits just below, and then we have the 50-Day EMA underneath there at the ¥130 level. Ultimately, it does look like we may see another crossover between these 2 moving averages, so that is something that will be worth paying attention to as well. In general, this is a market that is going to continue to look like a “buy on the dip” scenario.

The Bank of Japan continues to work against the yields in the bond market, with a cap on the 10 year yield at 50 basis points. That level has been hit over the last couple of days, meaning that they will have to continue to print yen, thereby driving down the value of the Japanese currency. Because of this, I do believe that we eventually go higher in this pair.

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