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

USD/JPY Forecast Video for 02-02-2024

US Dollar vs Japanese Yen Technical Analysis

As you can see, dollar-yen has initially pulled back just a bit during the trading session, bouncing from the 50-day EMA. With this, I think you’ve got a situation that we will be paying close attention to, especially with the non-farm payroll number coming out on Friday. Above the 147.33 level, we have a move to the 148.8 yen level. After that, we have the 149.8 level as well but if we break down below the 50-day EMA, then it opens up the possibility of a move down to the 145 level.

With this, I think you’ve got to look at this through the prism of a market that is going to be very noisy and the non-farm payroll number is going to throw the bond market around. And if that’s going to be the case, then the market will probably continue to be one that you have to be very conscious of. But overall, it looks like a buy on the dip situation. It’s really not until we break down below the 145 yen level that we need to worry about it, as this is a market that I think will continue to be a interest rate differential play, which is still wide enough to drive a truck through.

The Bank of Japan is nowhere near tightening monetary policy, and even though the Federal Reserve is likely to cut several times this year, they are light years away from being as loose as the Japanese. As long as that’s going to be the case, you get paid to hang on to this pair, and therefore I think you have to continue to hold the greenback against the yen. All things being equal, this is a market that continues to be significantly noisy, and therefore I think that we have a lot of volatility just waiting to happen. Value hunting is the way to go, and you should keep in mind that the non-farm payroll announcement will cause quite a bit of volatility in this pair.

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