USD/JPY Forecast – US Dollars Stalls in Upward Momentum

USD/JPY Forecast Video for 26.06.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied slightly against the Japanese yen during trading on Friday, as it looks like we are going to continue to see a little bit of noisy behavior, but at the end of the day, there is a major difference between the 2 when it comes interest-rate differential, and therefore I think we continue to see this pair go higher. The ¥142.50 level being broken above on Thursday is a very bullish sign and does open up a move to much higher levels. In fact, when you look at the market, you can see that we recently have broken out of a bullish flag that measures for a move to ride around the ¥149 level, and then, of course, we have the previous ascending triangle that should offer a similar “measured move.”

At the top of the previous consolidation ascending triangle, we have the 50-Day EMA; therefore, it looks like we have plenty of support. All things being equal, it looks like any short-term pullback offers value that you can take advantage of, and therefore you should treat this market as such. If you are a longer-term trader, you can hold onto this and get paid positive swap, and get paid to hang on to this pair. I have no interest in shorting this market, as the Bank of Japan has reiterated its desire to continue with quantitative easing.

Furthermore, several Federal Reserve officials have suggested that monetary policy will see a couple of interest rate hikes this year, so it’s likely that we will continue to see a lot of upward pressure on the US dollar against the Japanese yen, perhaps even most other currencies. As bond markets continue to price in higher rates, we have seen the Bank of Japan stubbornly fight the rest of the world. As long as they keep those interest rates so low, that continues to put downward pressure on the value of the yen itself, not only against the US dollar, but against most currencies in general. It may take a lot of patience but we should continue to go much higher over the next several months.

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