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

USD/JPY Forecast Video for 30.08.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the course of the trading session, as we are now above the ¥147 level. At this point, the market looks as it is ready to continue to go much higher, and I think that short-term pullbacks offer value as the interest rate differential between the 2 economies continues to be wide enough to drive a truck through. The ¥146 level should be supported, as it had previously been resistance.

At this point, any time we pull back, it should be thought of as a potential buying opportunity as the explosive move during the trading session on Tuesday shows just how much buying pressure there is. In fact, I don’t really have a scenario in which I’m willing to sell this market, at least not without the Bank of Japan changing its tune quite drastically. With that being the case, for me it’s going to be more or less a matter of fundamental analysis over anything else. I would need to see the market breakdown below the ¥142.50 level before I would even start to take any selloff seriously.

More likely than not, I think the market is likely to look into the ¥150 level, which is a large, round, psychologically significant figure and an area there should be a lot of options barriers at. Clearing that level would open up an even bigger move, and it’s possible that would bring in more “FOMO trading”, and therefore I think we’ve got a situation where the market will continue to look at every dip as an opportunity along the way, but if we do finally break that barrier, it could lead to a parabolic move.

The size of the candlestick for the trading session on Tuesday suggests that there is still plenty of interest, so therefore there’s nothing on this chart or in this market from a fundamental standpoint that changes anything at this point, and therefore I think we’ve got much further to go, and it’s probably worth noting that the Non-Farm Payroll announcement comes out on Friday, so we may have a little bit of indecision between now and then but the upward trajectory should continue.

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