USD/JPY Forecast – US Dollar Recovers After Initial Dip

USD/JPY Forecast Video for 19.10.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar initially fell a bit against the Japanese yen, showing signs of weakness, but then turned around to show just how resilient it has been. The ¥150 level above is a large, round, psychologically significant figure, and it of course will attract a lot of attention. If we can break above the ¥150 level, then the market is likely to continue going much higher.

The Bank of Japan continues its loose monetary policy, that of course works against the value of the yen. Ultimately, the Japanese yen is probably going to get slammed again, and it’s worth noting that overnight the Bank of Japan entered the bond market and started buying bonds again, in order to keep the yield down. In other words, we continue to see a lot of quantitative easing coming out of Tokyo, and that will only exacerbate the already strong run to the upside. The Federal Reserve of course is going to continue to see reasons to keep the rates higher in the United States, and therefore I think you get a situation where the US dollar is eventually going to take off to the upside.

Underneath, we have the ¥147.80 level offering support, right along with the 50-Days DMA. Ultimately, I think that’s your “floor in the market”, and it is worth noting that the market is probably going to continue to be very noisy to say the least around that area. If we were to break down below there, then you could make an argument for something a little bigger happening, but right now I just don’t see how that happens.

The interest rates continue to be a major driver of where we are going, and then of course the fact that the economic information coming out of the United States continues to show acceleration in both inflation and employment. In other words, money continues to flow toward the United States and away from the Bank of Japan and its loose monetary policy. Once we break above the ¥150 level, then I think we can look into the ¥152 level. After that, then the market becomes likely to reach toward the ¥155 level.

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