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

Christopher Lewis

The US dollar has gone back and forth during the trading week, as we see a lot of extreme volatility against the yen.

US Dollar, FX Empire

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USD/JPY Forecast Video for 08.05.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has gone back and forth during trading this week, as we continue to see a lot of noisy behavior in general. We are in a larger ascending triangle that should be paid close attention to, but I think it does make a certain amount of sense that one would have to assume there are buyers underneath willing to get involved. Having said that, we have seen a lot of erratic movement in the market as the jobs number on Friday came out much stronger than anticipated.

With that being said, there are a lot of questions as to what the Federal Reserve will have to do, and there has been a lot of panic behavior on multiple fronts. Nonetheless, we are still very much in this triangle, and I think the compression is still a very real thing. Because of this, it’s more likely than not going to be a scenario where the market will have to figure out what it’s going to do longer-term, and that might mean more volatility. The 50-Week EMA sits at roughly ¥132.50, an area that has been important multiple times on daily charts. On the upside, we have the ¥138 level offering a significant amount of resistance, so it will be interesting to see if we can get above there.

Ultimately, this is all going to come down to the bond market, which of course is currently acting more like the equity market as far as volatility is concerned. It is because of this that you will need to be very cautious, recognizing that the currency markets are very dangerous place to be at the moment.

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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