USD/JPY Price Forecast – The US Dollar Pulled Back Slightly

US Dollar vs Japanese Yen Technical Analysis

The US dollar pulled back a bit against the Japanese yen during trading on Tuesday as we gave back some of the extended Monday gains. That being said, the market looks as if it is going to find buyers just below, so I look at this as a simple dip in a bigger uptrend. Keep in mind that the Bank of Japan continues to do everything it can to fight bond yields, which is essentially buying “unlimited bonds.” They are the only major central bank that is actively so loose with its monetary policy, so therefore the Japanese yen will continue to take it on the chin.

The Federal Reserve continues to be very tight with its monetary policy, so this should not be a huge surprise to see this market continue to the upside. That being said, it does not go in one direction forever, so that should also not be a major surprise. Because of this, I think you have to look at this through the prism of a “buy on the dips” type of scenario. The ¥135 level should be supported, and then after that, you would have the ¥132.50 level come into the picture to show signs of support as well, not only due to historical price action, but the 50 Day EMA approaching it also.

I don’t have any interest in shorting this market, at least not until the fundamental situation changes. This is not likely to happen anytime soon, so I don’t believe that I will be short of this pair unless something quite significant were to come across the wires.

USD/JPY Price Forecast Video for 13.07.22

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