USD/JPY Forecast – US Dollar Continues to Test a Major Level

US Dollar vs Japanese Yen Technical Analysis

The U.S. Dollar has broken down a bit during the early hours on Monday to test the 140 yen level. This is an area that I think a lot of people will be paying attention to. And it’ll be interesting to see if there’s any chance of a bounce. We are pretty much right on the edge of a trend line at the same time as being at this large round psychologically significant figure.

But a lot of this comes down to what happens on Wednesday and Friday for the matter. Let us not forget that not only do we have an FOMC interest rate decision on Wednesday and the press conference, which of course is important. But we also have the Friday Bank of Japan interest rate decision and press conference. So that could leave this market the epicenter of a lot of noise this week.

Because of this, I think it’s interesting to pay close attention to this market. And if we can turn around and recapture the 142 yen level and the Bank of Japan isn’t as hawkish as people think they’re going to be. This could be the end of the sell-off. On the other hand, if we continue to see a lot of negativity here, I think that is a general signal that risk appetite will crater, and you will see it be a situation where everything sells off given enough time. So this is the epicenter of risk appetite in the currency markets.

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