USD/JPY Forecast – US Dollar Rallies Against Japanese Yen

USD/JPY Forecast Video for 22.03.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the trading session on Tuesday, to reach toward the sea ¥132.50 level. This is the top of the range from the previous session, suggesting that perhaps we are trying to figure out whether or not we can kick off the uptrend again. The 50-Day EMA is starting to break down below the 200-Day EMA, kicking off another bearish signal. Nonetheless, the reality is that both moving averages are essentially flat, and therefore it suggests that we are going to go back and forth.

The ¥135 level above is a major resistance barrier, but I do think that’s where we attempt to get to before it’s all said and done. This will be especially true when it comes down to what’s going on with the bond market, as the Bank of Japan continues to fight higher interest rates. That being said, interest rates have been dropping as of late, and that’s part of what has pushed the value of the Japanese yen higher at one point.

Underneath, the ¥130 level is an area where I think a lot of people will be paying close attention to, as it is a large, round, psychologically significant figure. Underneath there, we have the double bottom that formed at the ¥127.50 area. It’s also where the 50% Fibonacci level from the huge move last year, and therefore it makes a certain amount of sense that the market will pay close attention to it. That being said, the most important factor to keep in the back of your mind is that the Federal Reserve has a meeting on Wednesday, and therefore it’s likely that we will be paying close attention to it for hints as to where the Federal Reserve is going next.

After all, there have been tremors in the global financial system, so a lot of people are hoping that the Federal Reserve will not raise interest rates very much, or at all. However, with inflation running as rapid as it is, it’s very difficult to imagine a scenario where they do not. As they raise interest rates, rates could very well right across the board, putting more downward pressure on the yen and allow this pair to go higher.

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