USD/JPY Forecast – US Dollar Pulls Back

USD/JPY Forecast Video for 22.09.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has shown itself to be a bit volatile during the trading session on Thursday, but this does make a certain amount of sense against the Japanese yen as the Bank of Japan continues to try to job on the market, and of course they are the next central bank up in a long line of interest rate decisions this week, and being that the Japanese have been complaining about a weakening Japanese yen, it would not be surprising at all to see them try to do something to change the trajectory of this pair.

Furthermore, we are at an extreme high right now, so I do think that there is a potential for the market to pull back, perhaps reaching toward the 50-Day EMA. I don’t necessarily know that we are going to get all the way down to it, but it would not surprise me at all to see us dropping through the recent trading area and offer a bit of value underneath.

It would take an extraordinarily wild change of events for the Japanese yen to suddenly strengthen, and we do have quite a bit of time between now and when that happens. Because of the heavy debt that Japan is under, they cannot handle higher interest rates in that country. With this being the case, the interest rate differential will probably continue to be a major issue, therefore I am looking to buy this pair. However, I do believe that you get an opportunity to buy it at lower levels, and that is something worth paying attention to.

If we do go higher from here, then the next target is going to be the ¥150 level, but that would be a bit of a surprise for me personally, as it would take the Bank of Japan essentially throwing up its hands and letting the market do whatever it wants to do to their currency. This has been a major thorn in the side of the Japanese, and I think that continues to be something that you need to keep in the back of your mind and therefore recognize that the market is going to be volatile over the next 24 hours.

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