USD/JPY Forecast – US Dollar Rallies to Close Out the Week

USD/JPY Forecast Video for 25.09.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the Friday session as the Bank of Japan did very little overnight and said very little. This was despite the fact that there was a narrative around the currency world that perhaps they would do something to defend the currency, or at least try to jawbone the selling down. However, the market has seen quite a bit of upward pressure as very little was done, and now we continue to focus on the idea of trying to get back to the ¥150 level.

At this point, it looks like we are hanging around and consolidating, but that’s not completely out of the question, due to the fact that the market has a major interest rate differential gap between the 2 currencies, so therefore it continues to favor the greenback overall. After all, you can just simply sit on a position and collect gains at the end of every day via swap. Furthermore, the fact that the Bank of Japan failed to say or do anything tells you just how tenuous the position is in Japan, because quite frankly they can’t do anything about their currency if they want to keep low interest rates, which with their massive debt issue is going to continue to be the favorable outcome.

Ultimately, this is a scenario where dips will continue to attract buyers, with the ¥147 level, an area where a lot of people will be paying close attention to, as it has been important in the past. On the upside, the ¥150 level of course is an area that a lot of people will pay close attention to as it is a large, round, psychologically significant figure. Breaking above the ¥150 level could open up a move to go much higher, perhaps reaching the ¥152 level after that. Nonetheless, it looks like we are currently in a very choppy behavior pattern, and therefore I think we’ve got a situation where traders will continue to look for value and simply take advantage of it anytime the US dollar drops for a while. Ultimately, this is a situation where market participants will continue to see a one-way trade.

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