USD/JPY Forecast – US Dollar Pulls Back Against Yen

Christopher Lewis
Published: Nov 16, 2023, 14:37 UTC

The US dollar continues to consolidate against the Japanese yen, as we are a bit extended at extreme highs.

US Dollar, FX Empire

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USD/JPY Forecast Video for 17.11.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar fell a bit during the course of the trading session on Thursday, as it looks like we are going to head back toward the ¥150 level, an area that has been supportive a couple of times already. Furthermore, we have the 50-Day EMA racing toward that area as well, and therefore I think you got a situation where buyers will continue to jump into this market and try to find some type of value.

The Bank of Japan continues its ultra-loose monetary policy, but interest rates in America have been dropping as well. Nonetheless, the interest rate differential between the 2 currencies remains a mile wide, so therefore you get paid to hold onto this currency. With that, I think traders are still attracted to the US dollar when it comes to the Japanese yen markets, therefore I think we’ve got a situation where the traders are out there taking advantage of value every time we pull back.

Even if we do break down below the 50-Day EMA, I think there is plenty of support near the ¥147.80 level. That’s an area that previously had been resistance, so it should not be supported due to “market memory” on the charts. As long as we stay in an uptrend, I have no interest in shorting this market, and I do think that it is probably only a matter of time before value hunters come in and pick up the greenback.

Furthermore, if we can break above the ¥152 level on a daily chart, that opens up the possibility of a move to the ¥155 level, perhaps even higher than that. I think that the Japanese yen is going to be a currency that gets hammered against most other currencies, not just the US dollar. This is a Japanese Yen move, and the fact that the US dollar has pulled back during the day is noise at this point due to interest rates dropping for the session, but the trend is still very much to the upside, and I just don’t see that changing anytime soon as the Bank of Japan is light years away from changing its monetary policy, and the Federal Reserve is at the very least going to stay tight, even if they don’t continue to raise rates.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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