USD/JPY Weekly Price Forecast – The US Dollar Plunges Against the Yen for the Week

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has been all over the place against the Japanese yen during the course of the week, as we continue to see an extraordinarily volatile market play out. The ¥132.50 level is an area that we have seen a bit of a bounce from, and for what it’s worth, we could see a lot of interest in that area as the Friday candlestick was a bit of a hammer. That being said, this is a market that has been a bit overdone, so don’t be surprised at all if we see a massive amount of volatility going forward.

The Bank of Japan continues to flood the market with yen, as they are buying “unlimited government bonds”, which is the same thing as saying quantitative easing. Because of this, the Japanese will continue to be out of favor with traders, and therefore it makes quite a bit of sense that we see the US dollar move in the opposite direction. With this, once we get above the ¥135 level, then it’s likely we go much higher. At that point, then the market probably goes looking to reach the ¥137.50 level.

If we break down below the ¥132.50 level, then it’s likely that we drop down to the ¥130 level after that. Ultimately, this is a market that I think still looks very bullish, but we have to pay close attention to the markets overall as we have seen so much in the way of massive swings with volatility and risk appetite. Risk appetite is the main driver of where we go in most of these currency pairs, with everybody willing to jump on top of Japan because of its monetary policy.

USD/JPY Price Forecast Video 01.08.22

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