USD/JPY Forecast – US Dollar Continues to See Buyers on Dips

USD/JPY Forecast Video for 23.08.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar fell initially during the trading session on Tuesday, only to show signs of life by turning around again. All things being equal, this is a market that I think looks at the ¥145 level as a potential support level, which also had previously been a significant resistance barrier. Furthermore, the ¥145 level is an area where you would see a lot of psychology come into play as well.

Underneath, the ¥142.50 level is an area where we’ve seen some noise in the past, and then of course we have the 50-Day EMA coming into the picture right there as well. That could be your “floor in the market” as far as the overall uptrend is concerned. Keep in mind that it could be somewhat quiet over the next couple of days though, as we wait for Jerome Powell to speak on Friday, from the Jackson Hole Symposium. I think at this point, most traders are trying to figure out whether or not the Federal Reserve is actually going to stay tight for as long as they suggest.

At this point, I think we probably have to look at this through the prism of finding value on dips, as the Bank of Japan continues to keep its monetary policy extraordinarily loose. At this point, I think the market is likely to continue to see the ¥147.50 level as a potential target. If we can break above there, then I think the next area will be looking to get to the ¥150 level.

The interest rate differential alone is reason enough for the market to continue to see the US dollar do well against the Japanese in, but this is not just the US dollar that is going to see this, but perhaps the British pound, Australian dollar, New Zealand dollar, Canadian dollar, and so on. The Japanese yen will continue to be a bit of a punching bag for other currencies around the world, so the one thing that I do know that I won’t be doing any time soon is buying the Japanese yen against anything as the overall trend is firmly ensconced for that currency.

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