USD/JPY Forecast – US Dollar Continues to Build a Base Against the Japanese Yen

USD/JPY Forecast Video for 10.02.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has gone back and forth during the session on Thursday as we continue to see a lot of noisy behavior. At this point, we have filled the gap from the beginning of the week, and now it looks as if we are trying to stabilize things enough to turn back around. Alternatively, the 50-Day EMA sits just above, and if we can break that indicator, it’s very likely that we see this market go much higher. At that point, I would anticipate the ¥135 level being targeted, and then the ¥137.50 level.

On the other hand, if we were to break down below the ¥130 level, then I think we go looking toward the double bottom underneath which is just above the ¥127.50 level. That’s an area that has been very noisy for a while, going back a good year. Looking at this chart, I think if we break down below the ¥127 level, then it opens up a massive amount of selling that will be more or less like a massive air pocket that could really start to cause panic.

All things being equal, I believe that this is a market that will eventually find a reason to rally, but if we don’t, that is the trade you are stuck with. Keep in mind that the Bank of Japan continues to do everything it can to keep interest rates down below the 50 basis points level on the 10 year note, meaning that they may have to print massive amounts of yen. That is what drove the market last year, and therefore it’s likely that if we have that same fight, we should have that same reaction.

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