USD/JPY Price Forecast – US Dollar Finds Support Against the Japanese Yen

USD/JPY Forecast Video for 14.07.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has stabilized a bit against the Japanese yen after a massive selloff. At this point, it looks like the USD/JPY pair is trying to turn around, which makes quite a bit of sense considering that the ¥138 level was the top of a previous consolidation area in the form of an ascending triangle. Ultimately, the market bouncing from here could have the market looking toward the 50-Day EMA. The 50-Day EMA hangs around the ¥140 level, so that might be our target. All things being equal, this is a market that is now oversold, so it makes a certain amount of sense that we could see value hunters coming back in right now.

That being said, if the market were to break down below the ¥138 level, then the market could break down further. All things being equal, if we were to see that happen, the market could go down to the 200-Day EMA, which is closer to the ¥136.50 level. That obviously would be a huge sign as to what trend we are in.

However, it’s probably worth noting that the market is sitting on the 61.8% Fibonacci level as well, from the latest shot higher. We are also at the bottom of the previous bullish flag, so there are plenty of reasons to believe that this market might see support. Furthermore, we also have to keep in mind that the interest-rate differential still favors the US dollar over the Japanese yen. Beyond that, we also have the fact that the market is just simply oversold.

We are still very much in an uptrend, but the recent pullback has been brutal as people have placed in the idea of the next yield curve control move by the Bank of Japan. They are still light years away from the Federal Reserve, so this still has people looking toward the US dollar over the Japanese yen. In general, I would anticipate a recovery here, but I also recognize that there is high probability for volatility in this area, so you will have to see some type of confirmation on the move higher to start putting money back to work.

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