USD/JPY Forecast – US Dollar Pulls Back Only to Find Buyers

USD/JPY Forecast Video for 27.06.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar pulled back during the trading session on Monday, but it still looks as if we will recognize the ¥142.50 level as an area of potential support. That area previously had been resistant, so it should have some market memory attached. Because of this, I think it’s probably only a matter of time before traders come back into the market to pick up value and, by extension, “cheap US dollars.” Ultimately, this market has further to go to the upside, based upon the measured move of the bullish flag on the chart.

Furthermore, there was a market with a major ascending triangle previously that also had a measured move that suggests that we are going much higher, with its measured move suggesting that we will go to the ¥148 level. Beyond that, the bullish flag also suggests we are going higher, with the measured move reaching the ¥149 level. In other words, there are plenty of reasons to think we are going higher from a technical analysis standpoint.

Looking at the fundamental situation, you have the Bank of Japan and its monetary policy, which continues to be quantitative easing. Hence, the interest rate differential between the two economies is so great that it makes sense that we continue to see this pair go higher over the longer term. I have no interest in shorting this market, at least not until the Federal Reserve changes its overall attitude or if the Bank of Japan does. Until that changes, this market will continue to go higher over the longer term.

When the market pulls back, it should be a nice buying opportunity, as the US dollar will continue to see upward pressure due to the fact that the Federal Reserve is so tight with its monetary policy, and of course there are a lot of concerns around the world when it comes to the global growth situation. With that, I think it’s probably only a matter of time before we go much higher, and then look at each dip as a potential buying opportunity going forward, just as it has been over the last couple of months.

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