USD/JPY Forecast – US Dollar Recovers After Initial Dip

USD/JPY Forecast Video for 24-01-2024

US Dollar vs Japanese Yen Technical Analysis

The US dollar initially fell against the Japanese Yen only to turn around and show signs of life. That being said, I think one of the things you need to pay the most attention to is the fact that the Bank of Japan had an interest rate decision, a statement, and a press conference, that basically said nothing. And that’s why you’ve seen the Yen give up its gains. Quite frankly, it seems to be more of the same that we have seen for some time.

That being said, I think any time this market is pulling back, you have to look at this through the prism of trying to find value. The 147.33 yen level is an area that, of course, will attract a lot of attention as it has in the past. If we break down below there, then we have to look at the 50-day EMA, followed very quickly by the 145 yen level, which is an area that I think a lot of people are going to be very interested in trying to get long of. In that area, you are more likely than not to anticipate the 200-day EMA to have some type of influence as well.

The interest rate decision just kind of threw into the forefront the fact that the Bank of Japan is stuck, it can’t do anything with its monetary policy. And although the Federal Reserve is expected to cut in 2024, you can still drive a truck through the interest rate differential of these two currencies.

As long as that ends up being the case, it does make sense to hold dollars over yen. The reality is though, there are other currencies out there that are even better to hold against the yen, like the British pound, for example. The US dollar/Japanese yen pair is one that measures the overall strength or weakness of the yen. So even if you’re not trading this market and, say, you are trading the Aussie/Yen, then you can use this market as an indicator. This is a very important chart because it will tell you everything you need for the JPY-denominated currency pairs.

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