USD/JPY Forecast – US Dollar Continues to Pressure Upside Against Japanese Yen

USD/JPY Forecast Video for 08-02-2024

US Dollar vs Japanese Yen Technical Analysis

The dollar has rallied slightly against the Japanese during the trading session here on Wednesday. At this point, it looks like we are trying to turn around and take out the highs again. I think we will eventually, but right now this is a market that is going to remain somewhat choppy. After all, the US dollar has suffered at the hands of the idea that the Fed may be cutting this year, but at the same time you have to keep in mind that it’s being compared to the Japanese yen of all currencies.

And that, of course, is a currency that suffers at the hands of a central bank that, quite frankly, is not able to be anywhere near tight. As long as that’s the case, you get paid to hang on to this market and therefore I think people will do exactly that.

Underneath we have the 50 day EMA offering a lot of support as we have seen over the last several trading sessions, but now it looks like we are going to try to break higher and go to the 149 yen level. And then after that, we could be talking about 152 yen. As long as the interest rate differential remains the same, I don’t see how the Japanese yen gains any real strength against the US dollar as the US dollar is also a safety currency. So, at this point, we’ll have to wait and see.

It certainly looks as if the market is definitely trying to price in the idea that perhaps the Fed will stay tight for longer and that, of course, will continue to push the pair higher. I also like selling the Japanese yen against multiple other currencies, it’s not just a US dollar story, it’s mainly just a Japanese yen story at this point in time. With this, I am a seller of the yen against not only the USD but also other major currencies.

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