USD/JPY Forecast – US Dollar Pulls Back Against the Japanese Yen

USD/JPY Forecast Video for 21.06.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar caused quite a bit of noise during the trading session against the Japanese yen on Tuesday, as we continue to see a lot of noisy behavior. Ultimately, the market is hovering around the ¥141.50 level, which has been noisy over the last few days. Ultimately, this market sees a lot of support near the ¥140 level, so I think even if we do fall from here, it will probably be a market that finds plenty of support given enough time.

Remember that the Bank of Japan continues reiterating this desire to keep interest rates extraordinarily low. Therefore, the Japanese yen will continue to suffer at the hands of shorting. Ultimately, this is a market that I think is trying to get to the ¥142.50 level, and once we break above that level, we could likely go much higher. We look at the bullish flag recently formed through the prism of a “measured move.” That measured move suggests that we could look to the ¥148 level.

Ultimately, we get to that level, but it is a scenario where it could take quite some time to get there. As far as a deeper correction is concerned, the 50-Day EMA is sitting right around the ¥138 level and is rising, so I think it’s probably only a matter of time before we see the 50-Day EMA continue to race toward price. The ¥138 level is an area previously seen as resistance. Therefore, I think a certain amount of “market memory” comes into the picture to offer support.

Ultimately, this market continues to be very noisy, but this is essentially a “one-way trade.” After all, the market will likely continue seeing a lot of volatility. Still, there will be a lot of people out there willing to chase yield, which of course, you do earn positive swap owning the dollar against the Japanese and, or pretty much any other currency against the Japanese yen at this point. As the Bank of Japan has reiterated its desire to keep rates ultra-loose, I just don’t see how this trade changes anytime soon.

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