USD/JPY Forecast – US Dollar Sees Plenty of Volatility Against Yen

USD/JPY Forecast Video for 08-01-2024

US Dollar vs Japanese Yen Technical Analysis

The US dollar broke above the 145 yen level rather quickly on Friday, and the jobs number coming out stronger than anticipated gave a little bit of momentum to that move. That being said, I think it’s probably a bit much to think that we are just going to go straight up in the air, and it is worth noting that we have seen the market push back on the idea of being above the 145 yen level rather quickly. The 50 day EMA sits above, and that seems to be offering a bit of selling pressure as well. And it’s also worth noting that the US dollar might be a little bit overextended against the Japanese yen, at least from the short term perspective.

As the market is trading between the 50 day EMA and the 200 day EMA indicators, it makes a certain amount of sense that there is a little bit of uncertainty in this region. I do think that given enough time we will have to make a bigger move, but right now we just aren’t prepared to do so. Breaking above the top of the candlestick for the day on Friday would obviously be a very bullish sign and could send the US dollar reaching towards the 147.33 yen level, maybe even higher than that.

On the other hand, if we break down below the 200 day EMA, then it could send the dollar right back down to the 142 yen level. The 10 year yield will have a lot to say about where we go next as rising yields in America will drive the dollar higher against the lowly Japanese yen. Remember, the Bank of Japan has blanked a couple of times when it comes to the idea of raising rates, and I don’t think that they’re going to do so anytime soon.

Keep your position size reasonable and keep in mind that liquidity doesn’t fully return to the markets until early in the second week of January and there could be a lot of noise due to position traders putting big amounts of money into the market.

For a look at all of today’s economic events, check out our economic calendar.