USD/JPY Price Forecast – The US Dollar Pulls Back to Major Support Region

US Dollar vs Japanese Yen Technical Analysis

The US dollar has gone back and forth during the training session on Tuesday, showing signs of hesitation, but what’s interesting is that we found support right where you would expect to see it. The ¥137.50 level is an area that previously was significant short-term resistance, and it now appears that the market is willing to bounce from that region. By doing so, it suggests that the market will continue to be very bullish over the longer term, thereby pushing the US dollar higher against the Japanese yen, which is a bit of a punching bag at this point. Because of this, I think it is more likely than not going to continue to be a situation where buyers come in on dips.

Keep in mind that the Bank of Japan is doing everything it can to keep interest rates lower, which is another way of saying they are engaging in quantitative easing. On the other hand, the Federal Reserve is extraordinarily tight with its monetary policy, and therefore doing quantitative tightening. That is a perfect setup for divergence between the two central banks, and you see it plain as day on this chart. In other words, we continue to buy dips going forward, and there’s no real argument for this pair to fall significantly other than the fact that you could say is overbought.

Because of this, the ¥137.50 level is supported, followed by the ¥135 level. The 50 Day EMA has recently broken above the ¥132.50 support level and is starting to drive higher to reach price action. This pair looks as if it has much further to go to the upside.

USD/JPY Price Forecast Video for 20.07.22

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