USD/JPY Weekly Forecast – US Dollar Recovers For the Week

USD/JPY Forecast Video for 23.01.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has rallied significantly during the course of the trading week to break above the ¥130 level. That being said, the market has an uphill climb ahead of it, as we have seen such a massive amount of selling pressure as of late. This is something that’s going to be difficult to overcome, but it’s also worth noting that during the past week, the Bank of Japan has reiterated its decision to keep the yield curve control alive. After all, the market has been dealing with the fact that the Bank of Japan will continue to print unlimited yen in order to keep that 10 year note yield down to 50 basis points.

This makes the market flooded with Japanese Yen, but recently we have seen that yield curve control lifted from 25 basis points to a reading of 50 basis points. At that point, the Japanese yen started to gain strength, leading to the chart that you see now. That being said, it looks like now that the Bank of Japan has decided to reiterate its desire, now traders are banking on more of that Japanese Yen weakness. Whether or not this holds on is a completely different question, but it looks like the ¥127.50 level is an area that a lot of buyers are willing to jump in. This makes sense, it was an area where we had seen a lot of noise previously.

If we can break above the 50-Week EMA, then it’s likely that we could go looking to the ¥135 level, and then perhaps the ¥137.50 level. However, if we were to turn around and break down below the ¥127 level, this market could find a huge “air pocket” underneath.

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