USD/JPY Forecast – US Dollar Shoots Higher During the Trading Session on Friday

USD/JPY Forecast Video for 06.02.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has shot straight up in the air after the jobs number came out of the United States at an addition of 517,000. This was much stronger than the anticipated number, somewhere near 188,000, and therefore there has been a huge shock in the market. The size of the candlestick is significant, and it does suggest that we are trying to do everything we can to break out to the upside. There is an inverted hammer from a couple of weeks ago, and if we can break above there it’s likely that this pair goes much higher. The US dollar is getting a boost by the expected inflationary environment, and of course what’s going on in the bond market.

Underneath, I see the ¥127 level as a major support level, and I think it’s probably only a matter of time before that area brings in more buyers. Breaking down below that level, then it’s likely that we could see this market fall apart, and therefore open up the massive air pocket underneath which I think could send this pair down to the ¥115 level. I see that as being very unlikely, but if that were to happen, we would see the Japanese yen overtake most currencies.

That being said, there is a lot of noise just above, so I think the next 50 pips or so are going to be a bit of a choppy affair. Having said that, if we do break above the top of that inverted hammer, this market could really start to take off to the upside.

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