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

USD/JPY Forecast Video for 19.04.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar pulled back to reach toward the 200-Day EMA, which of course is an indicator that a lot of people pay attention to. Because of this, it’s probably worth noting that there should be a lot of noise in this area and of course support. I do think that the market is trying to turn around and rally over the longer term, but right now it’s more likely than not going to be a scenario where we will eventually find buyers, but the question will be when do they show up?

Ultimately, the 50-Day EMA sits underneath and is starting to rise, so that does offer the ability to see a bit of support in that area as well. Ultimately, this is a market that could go reaching toward the ¥135 level. The market breaking above the ¥135 level opens up the possibility of the ¥137.50 level, which is where the market has seen a lot of selling pressure previously. Because of this, I think it’s likely that we would see that area as a potential ceiling in the market, and therefore you would have to be cautious trying to get long in that area. However, if we were to break above there then it would obviously be a very bullish sign and could send the market racing higher. In that environment, I would fully anticipate that the market is looking to reach the ¥140 level.

Keep an eye on the bond markets of both countries, as the interest rate differential has a huge part to play in this market. You should also keep in mind that the Bank of Japan continues to have a major yield curve control policy and effect, and therefore will have to print currency if rates start to rise again, devaluing the Japanese yen itself. In that scenario, we could see the US dollar, and most other currencies, take off against the Japanese yen if yield start to rise again. Underneath, I would anticipate that the ¥130 level should be rather supportive, and to break down below there could open up the possibility of a move to the ¥127.50 level.

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