USD/JPY Price Forecast – The US Dollar Continues Recovery

US Dollar vs Japanese Yen Technical Analysis

The US dollar initially fell to test the ¥132.50 level early on Wednesday, but then turned around to rally. It looks as if we are trying to continue the longer-term uptrend, and therefore I think if we can break above the 50 Day EMA, then the market is likely to go reaching the ¥135 level. ¥135 level is an area that previously had been supported and now is significant resistance. That being said, I would anticipate that you need to pay close attention to the bond market more than anything else.

The market has been very noisy as of late, mainly due to the fact that the Bank of Japan has been buying “unlimited JGBs”, which is essentially the same thing as printing Japanese yen. In fact, the market will continue to see a lot of effects from the bond markets. The main reason that we had seen the Japanese yen strengthen until the last two days has been due to the fact that yields had been falling around the world. This essentially puts less pressure on the Bank of Japan to jump into the bond market.

That being said, the market is likely to continue to see a lot of choppy behavior, but if yields start to spike again, that will almost certainly send this pair much higher due to the interest rate differential more than anything else. Underneath, the ¥130 level is a major support level due to market memory and of course a certain amount of psychology comes into play due to the fact that it is a large, round, psychologically significant figure.

USD/JPY Price Forecast Video for 04.08.22

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