USD/JPY Forecast – US Dollar Rallies During the Course of the Trading Session on Tuesday

USD/JPY Forecast Video for 13.09.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar is rallying a bit during the course of the trading session on Tuesday, as it looks like we are ready to go higher. All things being equal, this is a market that continues to attract a lot of “buy on the dips” traders”, and therefore I think this makes perfect sense as we continue to see the interest rate differential cause a lot of interest in this market. The 50-Day EMA is underneath at the ¥145 level, as it is the bottom of the previous consolidation area.

Looking at the chart, the market looks as if there are plenty of people willing to get involved, and if we can reach above the ¥148 level, the market is likely to go reaching toward the ¥150 level. All things being equal, despite the fact that Bank of Japan Gov. Ureda said over the weekend to reporters that by the end of the year they may have enough employment data to return to “real rates”, the reality is that the interest rate differential between America and Japan remains large enough to drive a truck through, and it is likely to continue to be that way. With this, interest rate differential will continue to pay you to hold this pair, and I think that’s a big deal and a huge reason why this market has rallied.

If we were to turn around and break down below the 50-Day EMA, then it’s possible that we could go down to the ¥142.50 level. The ¥142.50 level is an area that the market has paid close attention to more than once in the past, so anything below there would catch my attention. That being said, we have already seen that despite the fact that there was yen strength right off the bat this week, there were plenty of people willing to call the bluff of the central bank, and therefore it’s likely that the market will continue to push higher. If we break above the ¥150 level, then more “formal trading” will be in the shoe.

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