USD/JPY Forecast – US Dollar Slams Into Big Figure

USD/JPY Forecast Video for 20.02.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied significantly during early trading on Friday to go looking to the ¥135 level. By doing so, it looks as if the market is ready to try to take that level out and go much higher. In this scenario, I suspect that we have a market that is continuing to focus on interest rates, and of course all of the problems that come with a yield curve control policy in Tokyo. As long as the Bank of Japan continues to have a yield curve control policy at 50 basis points on the 10 year, it means that they will occasionally be forced to print currency. As that happens, it drives down the value of the currency.

On the other hand, the Federal Reserve has made it abundantly clear that they are willing to keep tight for longer than the market continues to assume, therefore we’ve seen yield spike in America. With that being the case, it does make a lot of sense that this trade happened. Whether or not we can break above the ¥135 level remains to be seen, but it certainly looks as if it is something that people are trying to make happen.

The 200-Day EMA sits right around the ¥134 level, and should now offer support now that we are well above it. Ultimately, I think we are getting ready to squeeze a bit, and then make a much bigger move. Whether or not that happens right away remains to be seen, but it certainly is something that I will be keeping my eye on. With this, dips will more likely than not continue to offer buying opportunities.

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