USD/JPY Forecast – US Dollar Continues to Consolidate at Lows Against Japanese Currency

US Dollar vs Japanese Yen Technical Analysis

The U.S. dollar has been going sideways at this point against the Japanese Yen as we are hanging around the 145 yen level which of course is a large round psychologically significant figure. And it is of course a situation where we could bounce from here and just stay within the consolidation region. All things being equal, if we do break above the 145 yen level, then it opens up the possibility of a move to the 148.50 yen level.

On the other hand, if we turn around and break down below the 143 yen level, then it’s likely that the market goes looking to the 140 yen level. With all of that being said, I think the Core PCE number will have a major influence on this pair. We’ll have to see how that plays out on Friday. Between now and then, I probably wouldn’t expect too much. Maybe a little bit of a bounce, but nothing to get overly excited about.

We have recently fallen apart and at this point, I think this is a situation where we are going to continue to see noise and chop more than anything else. The Bank of Japan, of course, is going to be in a situation where they may raise rates again, maybe 10 basis points, but I think we’ve seen about the worst out of the monetary policy tightening from Tokyo, so now it’s all on the Fed again.

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