USD/JPY Weekly Price Forecast – US Dollar Continues to Climb

USD/JPY Forecast Video for 03.07.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has rallied a bit during the course of the trading week as we continue to see plenty of momentum. Whether or not the US dollar can continue to go higher at this point is probably an open question as we are so heavily overextended. That being said, as the market has gotten so far to the upside, it does make a certain amount of sense that we have to pull back. The bullish flag measured for a move to the ¥148 level, just as the ascending triangle does.

All things being equal, this market continues to see a lot of noisy behavior more than anything else. However, I also recognize that this is a market that will continue to move mainly on central banks, as the interest rate differential between the 2 central banks continues to be extraordinarily wide. If that’s going to continue to be the case, then it makes a lot of sense that the US dollar continues to go higher.

The Japanese have recently reiterated their desire to keep interest rates low, and as long as that’s going to be the case this market will not change. After all, the Federal Reserve has recently reiterated its desire to have at least 2 interest rate hikes this year, so the interest rate differential will continue to get you paid if you hold this position long during the rollover each day. With that, I look at pullbacks as a nice opportunity to go along with the overall trend and continue to go higher.

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