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USD/JPY Weekly Price Forecast – US Dollar Continues to Show Support And Strength

By:
Christopher Lewis
Published: May 17, 2024, 16:19 GMT+00:00

The US dollar has gone back and forth during the course of the trading week against the Japanese yen, but has recaptured the ¥155 level, which of course is a very bullish sign.

In this article:

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar initially pulled back during the week but has turned around to show signs of life at this point in time. I think you continue to find plenty of buyers underneath the ¥155 level, and therefore value hunters come in and take advantage of that interest rate differential. Remember, you get paid to hang on to this trade at the end of every session, so it makes more sense to own it than to short the market and pay for the privilege of doing so.

With that being said, the market is most certainly one that seems to want to continue to go higher over the longer term. But I also recognize that it is going to be a pretty significant fight. With this, I think you have a scenario where you are buying the dips and perhaps hanging on for what eventually could be a much bigger move.

I think the ¥160 level is very possible, and breaking above there would bring in the next wave higher. We had previously formed a massive ascending triangle and we have come back to test that. And now it looks like we are trying to fight our way higher. I think the key, of course, is going to be that it’s more of a fight.

We may not get these impulsive moves just simply because there is the possibility of the Bank of Japan getting involved. It’s not that they can change the trend, it’s just that they can slow it down. And that’s essentially what you’re working with.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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