USD/JPY Forecast – Dollar/Yen Likely to Wait for Jerome Powell and Ureda

USD/JPY Forecast Video for 20.09.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar had a relatively quiet trading session against the Japanese yen, as Japan observed a temporary break due to an ongoing holiday. However, market participants are eagerly awaiting the upcoming Federal Open Market Committee meeting scheduled for Wednesday, which is expected to inject some much-anticipated volatility into the market over the next couple of days. Currently, the focus of the market remains fixed on the critical level of ¥147.80, which is acting as a substantial barrier.

A potential breakthrough above this pivotal level could set the stage for a push toward the psychologically significant ¥150 threshold. It’s important to note that while ¥150 holds considerable psychological importance, it has been breached in the past, potentially diminishing its significance.

In general, this market has favored the strategy of buying during dips, although opportunities for such dips have been limited in recent days. It’s highly probable that the market will eventually take advantage of the opportunity to acquire US dollars at more favorable rates, particularly considering the Bank of Japan’s unlikely stance to make significant changes to its monetary policy. While they may attempt to influence the yen’s value through verbal interventions, a significant pullback is improbable, especially when considering the notable policy divergence between the Bank of Japan and the Federal Reserve.

Nevertheless, it’s prudent to brace for potential volatility, especially as we approach Friday, when the Bank of Japan communicates its stance. Despite the buzz surrounding this market, there is a growing belief that it will eventually experience a breakthrough, primarily owing to its resilience in previous breakout attempts. The 50-Day Exponential Moving Average, situated closer to the ¥145 level, serves as a short-term “floor” in the market’s current dynamics. However, please keep in mind that Tuesday may see subdued activity as market participants await the announcements from Jerome Powell.

In summary, the recent performance of the US dollar against the Japanese yen reflects the excitement building up around the forthcoming FOMC meeting and the temporary holiday in Japan. The critical ¥147.80 level remains a point of focus, with a potential breakthrough pointing toward the ¥150 mark. The strategy of buying during dips continues to make sense in this market, given the policy divergence between the Bank of Japan and the Federal Reserve. While occasional pullbacks may occur, the prevailing sentiment leans toward an eventual breakthrough, bolstered by the market’s recent resilience. Additionally, the presence of the 50-Day EMA offers additional support, highlighting the potential for a more favorable entry point.

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