USD/JPY Weekly Forecast – US Dollar Continues to Rally Against The Japanese Yen

USD/JPY Forecast Video for 22-01-2024

US Dollar vs Japanese Yen Weekly Technical Analysis

You can see the US dollar has rallied pretty significantly during the course of the trading week as we have smashed through the 147.33 level. At this point, it looks like the US dollar is going to continue to rally against the yen and perhaps reach the high. Although on the daily chart, it does look like we are starting to see a little bit of exhaustion.

That pullback should be thought of as a buying opportunity though, because quite frankly, the Bank of Japan is nowhere near trying to do anything about its monetary policy. And at the same time, we already know that the Federal Reserve is likely to cut this year. So even with rates dropping in America, the reality is that the interest rate differential is still pretty wide and therefore people get paid to hang on to this pair, and that will continue to drive it to the upside.

Keep in mind this is a market that will continue to pay close attention to the interest rates in both the United States and Japan, and therefore the interest rate differential continues to pay you to hold on to this pair and that should be a major driver of where we go next. All things being equal, this is a situation where there are plenty of buyers willing to get involved every time there’s a little bit of value offered, and that’s the way you need to look at it.

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