USD/JPY Forecast – US Dollar Pulls Back Against Japanese Counterpart

USD/JPY Forecast Video for 25-01-2024

US Dollar vs Japanese Yen Technical Analysis

The US dollar has plunged against the Japanese yen during trading here on Wednesday. However, we are approaching a support level, so it’ll be interesting to see how this plays out. The 50-day EMA underneath, I think, offers support as well. So, with all things being equal, I am a buyer of this dips, I just need to see some type of short-term bounce to get things going. The 145 yen level is also underneath and could offer quite a bit of support with the 200 day EMA racing towards it. On the other hand, if we turn around and take out the 149 yen level to the upside, it opens up a move to 149.80 yen and then eventually the highs, which are closer to 152 yen.

Keep in mind that the interest rate differential between the two currencies is pretty wide and therefore it will continue to pay you to hang on to this pair, and I think that’s a lot of what’s going on. With that being said, I believe this is a market where you are just simply waiting for a buying opportunity, and you will take advantage of it. Ultimately, I think we not only get to the highs, but break above there.

The Bank of Japan had an interest rate decision during the previous 24 hours and their statement basically left a lot to be desired as far as yen strength. That doesn’t necessarily mean we go straight up in the air. We have had a bit of a move higher so a little bit of a pullback I think is actually fairly healthy for this market and that might be part of what you are seeing. With this, I like the idea of buying bits and pieces of value. I don’t know that I would get heavily into this pair right away, but I do think that you build a position as it works out in your favor. I have zero interest in shorting this market right now.

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