USD/JPY Forecast – US Dollar Continues to Drift Against the Yen

USD/JPY Forecast Video for 03.01.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has fallen slightly against the Japanese yen during trading on Monday, in what would have been very thin conditions. Keep in mind that the markets will continue to see a lot of thin volume, so therefore you can only read so much into the candlesticks that we have made over the last couple of trading sessions. However, you can make a serious argument that ¥130 continues to be important, and for no other reason than from a psychological standpoint. Breaking down below that level could then open up a move down to the ¥127.50 level.

The bounce from here would more likely than not have to deal with the ¥132.50 level, and then most certainly at the ¥135 level, where we see the 200-Day EMA show enough to offer resistance. Anything above there would be a huge turnaround, but I don’t expect to see that happen anytime soon. Because of this, this is more or less going to be a “fade the rally” type of situation, which I plan on taking advantage of.

Ultimately, this is a market that looks as if it is going to continue to see strengthening of the Japanese yen, but a lot of this will come down to the bond markets, so you need to pay close attention to whether or not the interest rates around the world continue to climb. If they were to do so, that means the Bank of Japan will have to fight more, meaning it will have to print more yen and therefore this pair will turn around. On the other hand, if we see yields continue to drop globally, that should send this lower.

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