USD/JPY Price Forecast – US Dollar Recovers After Initial Dip

USD/JPY Forecast Video for 18.07.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has pulled back a bit during the trading session on Monday, to test the ¥138 level. The ¥138 level is a large, round, psychologically significant figure and the top of the ascending triangle that had been such a big factor in this market. All things being equal, I do think it probably sorts itself out and we have to determine whether or not the market memory comes into the picture and really starts to push things higher. If that’s going to be the case, then we have a situation where market participants will look at that as a potential bottom.

All things being equal, this is a market that I think has plenty of noise ahead, but I do think that eventually the uptrend resumes itself, especially as the Federal Reserve is likely to be very tight with its monetary policy, despite what Wall Street hopes will be the case. Quite frankly, they have shown their desire to completely ignore Wall Street, and therefore the higher interest rates will almost certainly come into play sooner or later.

Ultimately, the 50-Day EMA probably causes some issues, and there are plenty of previous trades in that general vicinity that could cause even more problems. When I look at the chart, the ¥140.50 level seems to be an area of intense interest, and I do think that will continue to be the case going forward. With that, I am waiting to see whether or not the market can get above there, and if it does I would anticipate that we go back to the high prices yet again.

At this point, I would be very cautious because the market seems like it wants to chop everybody’s account in half, and we certainly have a lot of noise out there that is not helping the situation. As people attempt to second-guess central banks around the world, it causes very difficult conditions for those who are trying to swing trade. Because of this, you must take your trades in small bits and pieces, because there is the likelihood that we will continue to see massive fake outs going forward, and therefore the environment will continue to be very dangerous.

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