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

By:
Christopher Lewis
Published: Jan 27, 2023, 15:04 UTC

The US dollar has rallied rather significantly during the course of the week, breaking above the ¥130 level, but has given up quite a bit of the gain.

US Dollar, FX Empire

In this article:

USD/JPY Forecast Video for 30.01.23

US Dollar vs Japanese Yen Weekly Technical Analysis

There’s a huge fight going on in this pair right now, based on momentum and fundamentals at the same time. After all, the market has fallen apart quite drastically, after initially shooting straight up in the air. Because of this, one would have to think that the market has to deal with quite a bit of a nasty pullback, and we may have already seen that.

If we break above the top of the candlestick for the trading week, that would be an extraordinarily bullish sign and cuts in this market much higher. Furthermore, you have to keep in mind that the Bank of Japan has reiterated its desire to keep the 10 year note down to 50 basis points.

In other words, they are going to have to print yen in order to keep those rates down as they will have to buy unlimited bonds. Nonetheless, I think this is a situation where we are going to see a big move sooner or later, and if we were to turn around and break down below the ¥127 level, then you could see the market really start to fall apart, because I see a huge air pocket underneath that level.

Nonetheless, we are oversold, and it does make a certain amount of sense that we would have to recover. Ultimately, this is a situation where we had shot straight up in the air, now we have fallen straight back down. This volatility will probably continue to be a major factor in this market, so therefore I would not be surprised at all to see a shot higher.

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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