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

By:
Christopher Lewis
Published: Sep 22, 2023, 15:20 UTC

The Bank of Japan came and went, and did very little, allowing the US dollar to continue to rally.

Yen bills, FX Empire

In this article:

USD/JPY Forecast Video for 25.09.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has rallied during the course of the week, as we continue to see upward pressure. The Bank of Japan choosing not to try to jawbone the selling of the Japanese yen back down and of course do nothing as far as rates are concerned has helped this situation, but it’s obvious that the market is a little bit stretched. At this point, short-term pullbacks will continue to offer buying opportunities, extending down to at least the ¥145 level.

If we were to break down below the ¥145 level, then the ¥144 level would be the next target. All things being equal, this is a market that is trying to form a little bit of a double top, and therefore it would not be surprising at all to see hesitation and a pullback. That could come into the picture to offer plenty of value that most people will be willing to take advantage of due to the fact that you get paid to hold on to the position due to the interest rate differential between the 2 banks.

The market will continue to be very noisy, but I think we are more likely than not getting ready to enter a period of consolidation, which is something that the pair will typically do after taking off the way it has recently. Nonetheless, it’s not until we break down below the ¥142.50 level that I would consider this market being somewhat bearish, and even then I’d have to take a look at the overall economic and fundamental situation to determine what I was getting ready to do next. I have no interest in shorting this market anytime soon, so that’s how I approach it.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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