USD/JPY Weekly Forecast – US Dollar Breaks Above Resistance

USD/JPY Forecast Video for 22.05.23

US Dollar vs Japanese Yen Weekly Technical Analysis

During the week, the US dollar rallied again, breaking out from a major resistance level at the ¥138 level. With that being the case, the market will continue to see plenty of noise above, but it certainly looks as if the interest rate differential between the 2 currencies will continue to play the main part of what happens in this market right now. It’s worth noting that the major breakdown that we saw late last year was a pullback to the 50% Fibonacci level, and therefore it’s likely that the market could go looking to the ¥140 level.

The size of the candlestick certainly suggests that there is a lot of noise out there, and with that being the case, it looks as if you will probably have to ride out through a lot of volatility, and therefore it does make a certain amount of sense that the trading community will continue to be somewhat schizophrenic. All things being equal, I am a buyer of dips, and it does make a certain amount of sense that we would see a lot of back-and-forth trading. If you are a longer-term trader, you are going to have to deal with that, perhaps with a reasonable position size.

On the downside, the ¥134 level should be massive support, right along with the 50-Week EMA which sits just underneath it. All things being equal, the ascending triangle has been broken to the upside, so that obviously is very bullish as well. All things being equal, this is a market that I am looking for value on, and I do like the occasional short-term pullback to offer that opportunity.

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