USD/JPY Forecast – US Dollar Bounces From 50-Day EMA Against Yen

USD/JPY Forecast Video for 20.11.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has fallen significantly during the course of the trading session on Friday, reaching down to the 50-Day EMA. We also broke down below the ¥150 level, which of course is an area that would attract a certain amount of attention. If we can turn around and break above that level, then it’s likely that the market could go looking to the ¥152 level again, as the interest rate differential favors the greenback. Ultimately, I think that is the play and despite the fact that Bank of Japan Gov. Ueda spent Friday morning in Asia trying to talk down the market, the reality is that the Bank of Japan can’t do anything.

Every time they say something, the market pulled back a bit, and then the market continues to go higher. The interest rate differential should continue to favor the greenback, and therefore I think we continue to see an upward trend regardless. Even if both central banks stayed where they were right now, there is still a huge spread between the 2, and therefore it pays to hold onto this market. I think we are probably more or less going to consolidate in the general vicinity for a while, so keep that in mind. I think short-term dips offer short-term buying opportunities. If we can break above the ¥152 level, then the market is going to go to the ¥155 level.

Alternatively, if we were to break down below the 50-Day EMA, then the market could go down to the ¥147.80 level. The ¥147.80 level underneath is an area that has been important previously, as it was major resistance. A certain amount of “market memory” could come into the picture, and therefore I think you probably have a certain amount of support just waiting to happen regardless. I have no interest in shorting the spare, and I do not want to own the Japanese yen under any circumstances as the interest rate differential will destroy your account if you hang on to the trade long enough. In general, this is a market that I think will eventually see plenty of reasons to go higher.

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