USD/JPY Forecast – US Dollar Sideways on Friday

USD/JPY Forecast Video for 18.12.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has gone back and forth during the course of the trading session on Friday, as we are hanging around the ¥142 level. The ¥142 level has put up a little bit of a fight, and we also have an uptrend line just below. That being said, we have the 200-Day EMA above offering a certain amount of resistance, and if we were to break above there, then it’s likely that we could see a bigger move to the upside. That being said, if we break down below the trendline, it could be very negative, opening up a drop down to the ¥138 level.

I think the next major catalyst for this pair is going to be the Bank of Japan, which people are waiting to see whether or not they are going to normalize rates. If they do, that would obviously be a big deal for the Japanese yen, but right now we are just simply trying to guess what the DOJ is going to do. As things stand right now, it is very likely that we continue to go back and forth and try to form some type of basing pattern.

Ultimately, if we were to break above the 200-Day EMA, then we could go looking to the ¥145 level, which of course is a large, round, psychologically significant figure. If we can break above there, then the ¥147.33 level is an area that people will be paying close attention to as well. Either way, I think we have a situation where the market is going to be noisy, and therefore I think you need to be very cautious about this position if you do get into it, therefore I think at this point in time you’re probably better off watching the market until we get through the Tuesday session when we get answers as to what the Japanese are going to do going forward. Ultimately, we are also heading into the time of year where liquidity becomes a major issue, so it could lead to erratic movement. Because of this, you are going to need to be very cautious if you are involved in this pair.

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