USD/JPY Forecast – USD Drops Again Against Yen

USD/JPY Forecast Video for 29-12-2023

US Dollar vs Japanese Yen Technical Analysis

The dollar plunged a bit during the trading session here on Thursday, as we continue to threaten the 141 yen level, an area that I think is a bit of a culmination of support that people will be paying close attention to.

The uptrend line is being threatened as well. So, if we were to take out the uptrend line, I think that opens up a pretty significant drop from here. In that environment, you are probably looking at a move down to 137.50 yen, perhaps even lower than that. A lot of this is being driven by the Federal Reserve supposedly cutting rates in 2024. And that has weakened the US dollar against most currencies. That being said, the Bank of Japan is still ultra loose with its monetary policies. So, I don’t know if the yen is going to be the strongest currency out there, other than the fact that maybe it’s a little oversold against the green bank. I do expect to see a bit of a divergence between the performance of the yen against the US dollar in comparison to other currencies. So, with that being said, I think we’re at a major inflection point and as we are between Christmas and New Year’s Day, I don’t read too much into it, but clearly if we were to break down below the 140 yen level, I think we have a real shot at this pair breaking down even further. On the other hand, if we were to turn around and rally above the 143 yen level, then…

You could make an argument that we are bouncing from a major trend line and going to continue going higher. Right now, though, it doesn’t really look like we’re ready to do that either. Nonetheless, this is an area we need to be watching closely and be vigilant about the potential surprises that could come.

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