USD/JPY Forecast – US Dollar Rallies Against Japanese Yen Again

USD/JPY Forecast Video for 24.07.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied rather significantly during the course of the trading session on Friday, as the Japanese yen continues to get hammered. All things being equal, this is a scenario where I think we try to go to the ¥142.50 level, which is an area that has been important multiple times. I recognize that the US dollar is maybe a little overbought in the short term, but I do think that we continue to try to go to the upside. Remember, you should get paid positive swap to hold this pair, so it makes a certain amount of sense that it goes higher.

A little bit of a pullback offers value, and therefore I think if we can break above the ¥142.50 level, then it opens up the possibility of a move to the ¥145 level. The ¥145 level is an area that is a significant barrier, and if we were to break above there, then the market is likely to continue to go much higher. Underneath, the 50-Day EMA should offer a certain amount of support, which is basically near the top of the overall bullish flag that I have marked on the chart.

The fact that we had an explosive day on Friday suggests that we are going to go higher. The market recently has pulled back to test the top of the previous ascending triangle, and have bounced quite nicely from there. In fact, the so-called “measured move” from breaking out of that triangle previously is likely to open up the possibility of a move to the ¥148 level. With that in mind, I continue to buy dips, and I continue to hang on to this market in order to take advantage of the positive swap and of course the fact that the Bank of Japan has no real interest in trying to change things, despite the fact that they have been trying to jawbone the markets. At the end of the day, as long as Japan continues to use loose monetary policy as a tool, I just don’t see how this market changes.

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