USD/JPY Price Forecast – US Dollar Continues to Grind Higher
US Dollar vs Japanese Yen Technical Analysis
The US dollar has rallied a bit during the trading session on Friday to show signs of life again. At the bank of Japan has reiterated its desire to keep the interest rates low in that country, it has been buying bonds hand over fist. In fact, they are willing to buy “unlimited bonds”, meaning that they are flooding the market with Japanese yen. In other words, this is a scenario where the market is essentially going to be in a one-way grind. I understand that the Bank of Japan has intervened recently, but they cannot stop this type of move as long as there is such a huge divergence between the 2 central banks.
Underneath, I anticipate that the ¥145 level is going to be a major support level, so I do not think that we break down below there anytime soon. If the ¥145 level does get broken, then it’s possible that we could be looking at the ¥142.50 level. Ultimately, this is a market that will continue to see plenty of volatility and noise, but I think we’ve got a situation where the dips are going to continue to be bought, as there is no reason for anything to change over the longer term.
As long as the Bank of Japan is willing to fight interest rates, the Japanese yen will continue to be a bit of a punching bag for other currencies out there. Ultimately, I think this is a situation where we eventually go looking to the ¥150 level given enough time. In fact, unless the Federal Reserve changes its policies, it’s likely that we continue to go higher over the next several months.
USD/JPY Price Forecast Video for 17.10.22
For a look at all of today’s economic events, check out our economic calendar.