USD/JPY Weekly Forecast – US Dollar Brakes Higher

USD/JPY Forecast Video for 27.02.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has rallied significantly during the trading week to break above the ¥135 level, showing signs of life yet again. Ultimately, this is a market that I think will try to continue going to the ¥137.50 level, as it was a major area of resistance. At this point, it’s probably only a matter time before buyers would come into the market on dips, but you will almost certainly have to look to shorter-term charts to make that trade. Furthermore, it’s also worth noting that the market had previously fallen all the way back to the 50% Fibonacci level after a huge move higher.

The Bank of Japan continues to do everything it can to keep interest rates down, and therefore you need to pay close attention to the 10 year note in Japan. The 50 basis points level is being closely followed, and therefore it’s likely that we continue to see the Japanese yen sufferers a result. After all, the Bank of Japan will have to print all of that currency in order to buy unlimited bonds. On the other side of the equation we have the Federal Reserve which of course is relatively tight going forward, and is probably going to stay so going into the future.

The latest inflation numbers have yet again proven to be hotter than anticipated, so it’s yet another reason to think that the Federal Reserve will continue its monetary policy. With that being said, and the fact that Tokyo is fighting so hard against that direction, it does make a lot of sense that this pair continues to go higher over the longer term. I have no interest in selling.

For a look at all of today’s economic events, check out our economic calendar.