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USD/JPY Forecast – US Dollar Pulls Back Against Yen

By:
Christopher Lewis
Published: Jun 25, 2024, 13:05 GMT+00:00

The US dollar has pulled back slightly during the trading session on Tuesday against the Japanese yen as we continue to see a lot of noisy behavior overall. Ultimately, this is a market that remains bullish though.

US Dollar vs Japanese Yen Technical Analysis

The U.S. Dollar has pulled back just a bit during the trading session on Tuesday, but it looks at this point in time that we have been seeing a little bit of support come back in. That makes quite a bit of sense, considering that the interest rate differential is huge between the US dollar and the Japanese yen. The Bank of Japan has absolutely no way to raise interest rates for any longer period of time, because quite frankly, the debt in Japan is so radically high that they cannot raise rates without wrecking the economy. At the same time, the Federal Reserve has to worry about inflation in the United States, and therefore rates may stay higher for longer.

With that being said, I think this is a scenario where you come in and you pick up every dip. That’s been the case for months, and I just don’t know how it would have changed in the last 24 hours. Yes, we are a little bit overextended perhaps, but if we can blow through the 160 yen level, it’s very possible that we could see this market totally take off the next leg higher being in focus.

Other yen related pairs have done that. So, it’s probably only a matter of time before the US dollar follows right along. Underneath we have the 50 day EMA, we have the 155 yen level, and even above all of that, we have the 158 yen level, all offering support. In other words, there are plenty of areas where the buyers could return to this market and lifted yet again.

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

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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