USD/JPY Forecast – US Dollar Rallies Against Yen

USD/JPY Forecast Video for 20.04.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied against the Japanese yen during the Wednesday session as we continue to see a lot of noisy behavior. However, we have also given back quite a bit of this gain as volatility continues to be a major issue. Ultimately, I think this is a scenario where you need to pay close attention to the interest rate situation around the world, as the Bank of Japan continues to fight rising interest rates against the 10 year JGB. They have a cap of 50 basis points in the 10 year note, so therefore every time they see interest rates rise to that level, they step in and start printing more yen so that they can buy more bonds. Ultimately, this is a situation where you should see plenty of noisy behavior in this pair.

Underneath, the 200-Day EMA offer support near the ¥133.50 level, with the 50-Day EMA underneath there and it is ready to go higher, then it’s likely that we could see a certain amount of a floor underneath, and therefore I think this remains a “buy on the dip” market. That being said, I also recognize that the ¥135 level looks as if it’s going to cause quite a bit of resistance, so I’m not necessarily looking to slice through it easily. The market will continue to see a lot of noise based upon not only the technical analysis, but also the fact that the bond markets are bit of a moving picture at the moment.

Traders around the world continue to bet that the Federal Reserve is going to blink, and then get slapped in the face with economic reality occasionally. Because of this, the bond markets have been a mess, and that in turn has made this pair a bit of a mess. That being said, it’s also worth noting that we have used the 50% Fibonacci level is a bit of a springboard, as we have tried to form a bit of a double bottom. Breaking down below all that would be very negative, but we will have to wait and see whether or not that plays out. I suspect that the market continues to show a lot of confused volatility.

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