USD/JPY Weekly Price Forecast – US Dollar Gives Up Early Gains for the Week

USD/JPY Forecast Video for 31.10.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar initially tried to rally during the course of the week but gave back gains as the ¥150 level continues to be a major barrier. In fact, we ended up forming a bit of a shooting star, which was preceded by a couple of hammers. What this typically means is that you are about to enter a period of consolidation. With that being the case, it could be very difficult to trade longer-term charts, but if we were to break above the top of the weekly candlestick, then it would obviously be a very bullish sign, perhaps sending this market to the ¥152 level.

On the other hand, if we break down below the bottom of the hammer from 3 weeks previous, which is essentially at the ¥147.80 level, then it opens up even further selling. That particular hammer is of interest to me because it was formed by the Bank of Japan intervening in the currency market. I don’t think that happens, I think more likely than not, we are going to go back and forth and try to sort out whether or not the interest rate differential will continue to favor the greenback.

It should, but there’s also the possibility that we are just so exhausted at this point that we need to go sideways for a while, or even perhaps pull back a bit. Either way, I will not be shorting this pair anytime soon, at least not until the fundamental situation changes. As things stand right now, it is still very pro-US dollar, so therefore I don’t think there’s a lot to do right now from a longer-term trading standpoint.

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