USD/JPY Forecast – US Dollar Turns Around

USD/JPY Forecast Video for 01.11.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied rather significantly during the trading session on Tuesday as the Bank of Japan meeting only suggested that they were going to loosely have some type of interest rate. In other words, they did not lift it completely, and therefore the Japanese yen is probably going to continue to experience a lot of pain. We have not only seen it against the US dollar, but we have seen the Japanese yen get sold off against almost everything.

The size of the candlestick is of course very telling, and I do think that we continue to go much higher, perhaps testing the ¥152 level given enough time. Ultimately, this is a market that will have some resistance in the ¥152 level as it was a major resistance previously, but once we break through there it’s likely that this pair will go looking to the ¥155 level. Now that the market is past the BoJ meeting, this will probably move more or less on interest rate differential than anything else.

Underneath, the 50-Day EMA continues to hang around the ¥147.80 level, and I think it does offer a bit of the floor. The market will look at that as the floor in the market at the moment, and if we were to turn around and break down below there, it would obviously be a very negative turn of events. At that point, I would assume that the Bank of Japan had intervened.

I’m currently looking for short-term pullbacks to take advantage of value in the US dollar, and I do think that it is probably only a matter of time before we get those. I don’t necessarily like the idea of getting too cute with this because this is a trend that has been intact for several months and I just don’t see how it changes with the interest rate differential being what it is. You get paid to hang on to this pair at the end of the day, and the “carry trade” continues to be one of the biggest advantages here. Because of this, I remain long and I look to add as we go further along this trend.

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