USD/JPY Weekly Price Forecast – US Dollar Continues to Power Higher

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has rallied rather significantly during the week to show signs of strength yet again, and now that we are above the ¥137.50 level, it looks like we are ready to go higher. The ¥140 level is a potential target at this point, but this is the very epitome of a parabolic market. Parabolic markets typically have vicious corrections, although there are no signs of it at this point.

The ¥135 level should be supported, as it is a large, round, psychologically significant figure and an area where we have seen a lot of noise previously. If we were to break down through that level, then it’s likely that the market goes looking toward the ¥132.50 level, followed by the ¥130 level. Quite frankly, this is a market that could drop down to the ¥130 level, and still be in a huge uptrend. Even though that’s almost 900 pips, with the size of this rally, that still is a reasonable pullback. In other words, the risk-to-reward relation of going long at this point just doesn’t make any sense.

Do not get me wrong, I’m not looking to short this market but if the Bank of Japan were to change its overall attitude and quantitative easing plan, then I might look to short this market, but until that happens, I think any dip should be thought of as a potential buying opportunity, but as I said previously, this is a market that is well overdone, and we could see a lot of noise as a result. The higher we go, the more dangerous this becomes.

USD/JPY Price Forecast Video for the Week of 18.07.22

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