USD/JPY Price Forecast – US Dollar Bounces to Kick Off the Week

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the trading session on Monday as we have taken back the ¥140 level. The market has been oversold recently, so it certainly looks as if we are going to continue to see quite a bit of volatility, as traders around the world are trying to figure out whether or not the Federal Reserve will actually slow down its tightening policy. At this point, even if they do it’s very likely that we will continue to see the US dollar strengthened for a lot of different reasons.

The first thing of course is the fact that even if they slow down the rate of hikes, the monetary policy is going to be much tighter in America than it will be in Japan, as Japan is actively fighting rising interest rates. They have been essentially “printing yen” for some time, thereby driving this massive move higher over the last several months.

A cooler than anticipated CPI number on Thursday of last week had people dumping the dollar, but it is still extraordinarily hot. 7.7% year-over-year inflation is not something that the Federal Reserve is going to be anywhere near changing its policy over, so I do think that eventually we continue to see this market rise over time. That being said, this pullback was probably needed for a while, so it more likely than not will be a continuation given enough time. At this point, the market is likely going to find its footing sooner or later, and therefore I am a buyer of this pair on this big dip. I would not jump “all in” right away, rather I am building a position again.

USD/JPY Price Forecast Video for 15.11.22

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