USD/JPY Weekly Forecast – US Dollar Breaks Out of Triangle
USD/JPY Forecast Video for 29.05.23
US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar rallied rather significantly during the course of the week, breaking above the top of the triangle that we have been forming for a while. Breaking the ascending triangle allows the market to go much higher now, and at the end of the week we are threatening the ¥140 level. If we can break above there, then it’s likely that we could go looking to the ¥142 level. After that, then it opens up the possibility of a move to the ¥140 level, based upon the “measured move” of the triangle itself. Short-term pullbacks could offer buying opportunities, and the ¥138 level is a major barrier that traders start paying close attention to for a floor as it was the top of that triangle.
At this juncture, I am not interested in shorting this market because the Bank of Japan continues its yield curve control policy and therefore puts a lot of pressure on the Japanese yen given enough time. All things being equal, this is a market that has no reason to fall for any significant amount of time. Looking at this weekly candlestick, you can see just how bullish this pair has been over the last week and, of course, the last 2 weeks, as we have seen so much in the way of explosive upward momentum that I think this is the beginning of something bigger. I am a buyer of dips, and given enough time, it is an opportunity for people to take advantage of “cheap dollars.” Until the Bank of Japan changes its overall attitude, I think this is going to be the story going forward.
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