USD/JPY Forecast – US Dollar Pulls Back Just a Bit

USD/JPY Forecast Video for 29.09.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has fallen a bit during the trading session on Thursday, as we have gotten a little bit stretched. Nonetheless, this is still a market that wants to go much higher and over the longer term should reach the ¥150 level rather easily. After that, we could be looking at a move to the ¥152 level, which is an area that we had tested previously. If we can clear that area, then the market could go much higher than that.

Underneath, the ¥147.80 level is an area that that has previous resistance attached to it, so a certain amount of “market memory” could come into the picture, and therefore I think buyers would be very attracted to that area. The 50-Day EMA is rising from here, reaching the ¥146 level and now looks as if it’s racing toward the recent trading action. Nonetheless, this is a market that is very likely that we will continue to see a lot of buyers and volatility, as the interest rate differential between the Federal Reserve and the Bank of Japan continues to be very wide.

The recent central bank decision coming out of Tokyo was a non-decision, and it showed just how weak the Bank of Japan is at the moment. In other words, they can’t do anything about the market moves, besides trying to talk things back down. They have no ability to raise interest rates in an environment that sees the Japanese economy threatened with some of the words debt levels in the world.

On the other side of the equation, we have the Federal Reserve which is likely to stay “tighter for longer”, even if they don’t continue to raise interest rates very often. Along the lines, you get paid to hang on to this pair, so there’s no reason to think that investors would be sellers. Short-term fluctuations offer opportunities, and therefore you need to pay close attention to when the market starts to turn back around and show signs of life. I have no interest in shorting.

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