USD/JPY Forecast – US Dollar Rallies Against the Yen

USD/JPY Forecast Video for 11.10.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar pulled back just a bit during the trading session on Tuesday, only to turn around and show signs of strength again. Ultimately, this is a market that looks as if it is consolidating, perhaps building up pressure for the next move. If that does in fact end up being the case, then it’s likely that we should continue to see the uptrend come into play, and we will eventually take out the ¥150 level. That being said, the ¥150 level is an area that will attract a lot of attention due to the fact that it is a large, round, psychologically significant figure, and an area that recently had caused quite a bit of selling.

There was a rumor that perhaps the Bank of Japan had a lot to do with the selloff that we saw at the ¥150 level, but right now that doesn’t seem to be the case so it leaves more questions than answers. Nonetheless, it’s a situation where we should continue to see upward momentum over the longer term due to the interest rate differential, and therefore I think you continue to buy the US dollar every time it dips. Whether or not we break out anytime soon remains to be seen, but we clearly have a couple of boundaries to deal with in the form of the ¥147.80 level underneath, and of course the ¥150 level above.

Pay close attention to the bond markets, as higher interest rates will of course work against the Japanese yen as the Bank of Japan is doing everything it can to keep interest rates low in a high rate environment. This is toxic for the currency, and therefore I think we continue to see more of the same. The 50-Day EMA is racing toward the ¥147.80 level, as it was previous resistance, it should make a nice confluence for the bullish traders out there. I have no interest in shorting this pair, at least not until the Bank of Japan or the Federal Reserve changes its tune. That seems to be very unlikely at this point in time, so I remain bullish but recognize that momentum has slowed.

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