USD/JPY Weekly Forecast – US Dollar Spikes Against the Japanese Yen

USD/JPY Forecast Video for 14.08.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has seen quite a bit of momentum to the upside, as it looks like we are trying to break out above the ¥145 level. This is a major candlestick forming, especially now that we have broken above the top of the shooting star from the previous week. This obviously is a very bullish sign, and I do think that it is probably only a matter time before we take off to the upside and go looking toward the ¥147.50 level, possibly even the ¥150 level. Underneath, the ¥142.50 level underneath should offer plenty of support, and then again all the way to the ¥138 level.

That being said, the Bank of Japan continues to engage in quantitative easing, which of course has a negative effect on the currency, as they continue to buy bonds. With that being said, it’s worth noting that the Federal Reserve is shrinking its balance sheet, which is the exact opposite of what the Bank of Japan is doing, so therefore it’s a bit of a “perfect trade.” Short-term pullbacks continued to offer buying opportunities, and then of course a breakout to the upside opens up more momentum.

Keep in mind that the market has expended a lot of energy, so it does make a certain amount of sense that we would have a little bit of a pullback, but I think given enough time we have a situation where we just continue to drive higher. I don’t think that this is necessarily going to be an easy move, but it is clear that we have an overall upward momentum that traders will be better paying attention to.

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