USD/JPY Forecast – US Dollar Bounces From Same Support Level

USD/JPY Forecast Video for 31-01-2024

US Dollar vs Japanese Yen Technical Analysis

The dollar-yen has initially pulled back just a bit during the trading session, but right now it looks like we are simply just grinding away sideways to work off some froth. By doing so, it tells me that the market is more or less still in the same type of attitude. In other words, I don’t know what’s going to change in the next 24 hours, and unless Jerome Powell shocks the market, I don’t know what’s going to change after that. In general, the US dollar is still favored over the Japanese yen on the whole.

But with the FOMC meeting and statement, and perhaps even more importantly, the press conference coming on Wednesday, it’s likely that we are going to be paying close attention to whether or not the Federal Reserve is going to be cutting in 2024. And more importantly than that, how aggressive they are going to be. Underneath we have the 50-day EMA that could offer a significant amount of support, while the 149 yen level is resistance, followed by the 149.80 yen level. Even if we were to break down below the 50-day EMA, I think there is plenty of support near the 145 yen level and then perhaps even down to the 200-day EMA. In general, this is a market that I think does continue to favor the upside in general, mainly because the Bank of Japan has absolutely no signs of tightening monetary policy and therefore the Japanese yen will continue to suffer.

Whether or not you choose to short the yen with the US dollar or other currencies is entirely up to you, but I do think that the overall directionality of yen-denominated pairs will be higher and that’s not going to be any different here. Expect a lot of volatility over the next 24 hours but I think at the end of the day even if we do break down from here it’s only going to end up being a nice buying opportunity based on value.

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