USD/JPY Weekly Forecast – US Dollar Gives Up Early Gains for the Week

USD/JPY Forecast Video for 26.12.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar is treading on thin ice at the moment against the Japanese yen. When I look at this chart, it is the previous weekly candlestick that I am paying the most attention to, right along with the trendline that has been so important for so long. While we are still technically in an uptrend, if we break down below the bottom of the candlestick for the previous week, then I think it opens up quite a bit of downward pressure, perhaps down to the ¥130 level.

On the other hand, if we were to turn around and break above the top of the candlestick for this past week, it would be breaking above an inverted candlestick, showing massive upward pressure just waiting to take off. I think at this point in time both the central banks are going to continue to be very loose with its monetary policy, and that of course means that it is a fight between a couple of potential lightweights.

All of that being said, the candlestick does not look very bullish, so I think you need to keep that in mind. Ultimately, this is a pair that is on the precipice of some type of major move, but this next week features a lack of liquidity that could make trading somewhat difficult. Keep an eye on this, because we may be getting a sneak peek at the way things play out in 2024 over the next week or 2. Ultimately, the Federal Reserve possibly loosening rate seems to be the thing that most people are willing to trade based upon.

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