USD/JPY Price Forecast – The US Dollar Finds Buyers On The Dip

US Dollar vs Japanese Yen Technical Analysis

The US dollar has fallen a bit during the trading session on Friday to threaten the ¥135 level. However, the market has turned around since that breakdown, and therefore it looks like the uptrend may continue. Ultimately, this is a market that has been very bullish for quite some time, and with the Bank of Japan fighting interest rates, essentially going into quantitative easing, this makes the Japanese yen especially vulnerable.

On the other side of the equation, the Federal Reserve is extraordinarily tight, and therefore I think it makes perfect sense that we see the US dollar continue to strengthen over the Japanese yen. We have a complete divergence between the two central banks, and that sets up a bit of a “perfect storm” when it comes to trading this pair.

If we do break down from here, I think there is plenty of support near the ¥132.50 level, and most certainly at the ¥130 level where we also see the 50 Day EMA. The market would have to break through all of that to threaten negativity, and therefore I would have to pay close attention. However, we are 500 pips away from that happening, so at this point, I assume that we continue to see plenty of buyers on dips and will have to use them as opportunities to get long of a pair that is in such a strong uptrend. Furthermore, the shape of the candlestick is a hammer, and that of course is bullish in and of itself. The ¥136.65 level is the recent high, and if we can break above there it should continue for a move to the ¥140 level.

USD/JPY Price Forecast Video 27.06.22

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