USD/JPY Forecast – US Dollar Continues to Show Strength Against Japanese Yen

USD/JPY Forecast Video for 20.06.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has tried to rally a bit during the trading session on Monday, but it’s worth noting that it was Juneteenth in the United States, so a certain amount of liquidity would be missing. Furthermore, the market looks as if it is facing resistance near the ¥142.50 level. If we can break above there, then the market is likely to continue going much higher. On the other hand, if we pull back from here, I think that the ¥140 level is an area of significant support.

We have recently broken out of a bullish flag, which of course makes a lot of technical traders interested in this pair. I think you have to be a buyer of dips in this market, and I do think that eventually we break above the ¥142.50 level. After all, the market has a massive interest rate differential between the 2 central banks, and it’s obvious that the Federal Reserve is still relatively tight. Despite the fact that they chose to skip the latest meeting for an interest rate hike, the Bank of Japan has made it clear that they are going to keep that loose monetary policy.

Measuring the potential move based on the bullish flag, it looks like this pair will eventually go looking to the ¥148 level above. That being said, the ascending triangle that the market broke out of previously before breaking out of the bullish flag measures for a move closer to the ¥150 level. Pullbacks will more likely than not see the ¥138 level offer a significant amount of support as it was the top of the ascending triangle. Furthermore, the 50-Day EMA sits right around that level as well, so it all comes together for a nice potential floor in the market.

At this point, I have no interest whatsoever in trying to buy the Japanese yen, so this is a one-way trade as far as I can see, which is the same thing I can say about multiple Japanese yen related pairs, not just this one. Ultimately, this is a market that I think continues to see plenty of interest to the upside.

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