USD/JPY Weekly Forecast – US Dollar Finds Buyers on a Dip

USD/JPY Forecast Video for 12.06.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has fallen a bit against the Japanese yen during the week, only to find buyers underneath. Ultimately, the market has broken above the ¥138 level, an area that previously had been resistant based upon the ascending triangle that I have marked on the chart, and therefore I think it’s probably only a matter before buyers would come into the market on short-term pullbacks. On the other hand, if the market were to turn around and break above the ¥145 level, and if the market were to stay above the ¥140 level, we could likely go much higher.

If and when we finally clear the ¥145 level again, I think it’s probably only a matter of time before the US dollar reaches the ¥148 level, which is the “measured move” of the ascending triangle. Ultimately, I think this will continue to be a very noisy market and, of course, move based on the interest rate differential between the 2 central banks, as the Japanese continue to practice yield curve control. Ultimately, the Federal Reserve remains very tight with its monetary policy. With the Federal Reserve meeting next week, they will probably reiterate the need to continue to tell people just how tight they are going to be. With the Japanese refusing to budge on their yield curve control, it’s very unlikely that the overall dynamics of this market will change.

There is a bit of negativity on the US dollar in general. Still, this situation is where the Japanese yen being weakened will have more of an effect on the market than anything else. All things being equal, this is a market that I think continues to go toward that ¥148 level, and perhaps showing signs of continuation but maybe in more of a grinding fashion than anything else. If we were to break down below the ¥138 level on a weekly chart, that could change things, but right now, it does not look like much has changed when it comes to the fundamental situation in this market, therefore I think traders will continue to look at it through the same prism.

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