USD/JPY Forecast – US Dollar Tests 200-Day EMA

USD/JPY Forecast Video for 24.04.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar fell a bit during the trading session on Friday but continues to see support just below. The market is sitting on the 200-Day EMA, which of course would attract a lot of technical attention. If we were to break down below there, then it’s likely that the market is looking toward the 50-Day EMA underneath, which of course is also very important. These moving averages both could cause a certain amount of support, so it is worth paying attention to.

If we break down through those moving averages, then it’s likely that we could see this market drop down to the ¥132 level. In that environment, we probably see the US dollar struggle in general. That being said, it’s very unlikely that we see that happen very easily against the Japanese yen. Ultimately, this is a situation where we are paying close attention to the US dollar in general, and of course we have to pay attention to the Bank of Japan yield curve control game that they are playing, with the 10 year JGB being penned to 50 basis points or lower.

On the other hand, if we turn around and bounce from here, then it’s possible that we could go looking to the ¥135 level, which is an area where we have seen some selling pressure recently. Furthermore, there’s a certain amount of historical pressure there as well, and therefore I think it continues to be a bit of a ceiling. If we can break above there, then it’s likely that we could go looking to the ¥137.50 level, which is an area where we have seen a lot of resistance.

When you look at the longer-term chart, you can make an argument for a bit of an ascending triangle, which extends all the way from the ¥127.50 level to the ¥137.50 level, so we could be in the midst of trying to build up enough pressure for a longer-term move. However, that remains to be seen and therefore we need to see whether or not you can actually break out. We are a long way from there, a right now it looks like there is a significant amount of support underneath.

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