USD/JPY Weekly Price Forecast – US Dollar Plunges Against Japanese Yen

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has plummeted against the Japanese yen as inflation numbers came out a little bit cooler than anticipated. That being said, 7.7% year-over-year is still astronomical, and is more than triple what the Federal Reserve is trying to achieve.

The knee-jerk reaction has been absolutely brutal, and you can see by the candlestick there has been a lot of selling pressure in the USD/JPY pair. However, the pair is a bit different in the sense that the Bank of Japan has been doing yield curve control, meaning that they been keeping the yields on their 10 year note down to 0.2%. This is the same thing as printing Japanese Yen.

So in a convoluted sense, the fact that the Federal Reserve might not be as aggressive has cooled off the bond market a bit, and driven down yields. This means that there is less pressure on the Japanese, at least in the short term so therefore they are not printing as many yen. The size of this candlestick could suggest the trend change, but quite frankly the market was leaning so far in one direction that the candlestick could be no smaller than the massive one that we got.

This all comes down to bonds and has almost nothing to do with the dollar or the yen. Unless you have the ability to follow that market, the only thing you can do is look at this and wait for opportunities to start buying on a support level, or some type of hammer, etc. I have no interest in shorting this pair, and I do suspect that there probably will be a vicious snapback.

USD/JPY Price Forecast Video for 14.11.22

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