USD/JPY Forecast – US Dollar Continues to See Noise Against Yen

USD/JPY Forecast Video for 19-01-2024

US Dollar vs Japanese Yen Technical Analysis

The US dollar has initially pulled back just a bit during the trading session on Thursday against the Japanese yen, but it does appear that there are plenty of buyers underneath. This is a market that I think given enough time will show plenty of buyers getting involved with the 147.33 level offering the first signs of support. At this point in time, I think the market is likely to continue to look for some type of bounce to start buying the greenback again.

Underneath there, we then have the 50-day EMA, which of course is an area that I think traders will pay attention to as well. The pair is a little overextended at the moment, but obviously bullish for a reason, and that will mainly be to the Bank of Japan’s unwillingness to do anything to tighten monetary policy. After all, they have far too much debt in Japan to have higher interest rates, so essentially the Japanese have to wait and hope that rates drop around the world and that eventually they can normalize through attrition. Whether or not that ends up being the case remains to be seen, but as things stand right now, it’s clear that the Bank of Japan has no intention of tightening monetary policy, and therefore the interest rate differential still greatly favors the US dollar.

Nonetheless, we can’t go straight up in the air forever, and I think that sooner or later we will get a little bit more significant of a pullback that we can start buying into. It’s probably worth noting that we had previously seen quite a bit of support near the 141 yen level, which coincided nicely with an uptrend line as well. Longer term, I do think that we try to get to the highs again near the 152 yen level. I don’t know how long it will take because quite frankly, markets seem a little lost and confused in general right now, although this pair has been relatively steady.

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