USD/JPY Forecast – US Dollar Continues to Threaten Resistance

USD/JPY Forecast Video for 21.02.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has gone back and forth against the Japanese yen during trading on Monday, as the market still looks at the ¥135 level as a potential resistance barrier. That being said, the market also is sitting just above the crucial 200-Day EMA, so the question will be whether or not it can offer support. The 50-Day EMA sits underneath there and is trying to curl back to the upside so I would anticipate quite a bit of noisy behavior. The market has been repudiated at the ¥135 level, but if he can break above there it has a clear shot to the ¥137.50 level.

If we can break above there, then the market can continue to go much higher. All things being equal, this is a situation where we see a lot of volatility over the next several days as the Bank of Japan continues to fight higher interest rates, meaning that they will be printing more Japanese yen, thereby driving down the value of that currency. On the other side of the equation, you have the Federal Reserve keeping a very tight monetary policy, so thereby offering a bit of support to the US dollar, despite the fact that may not necessarily be their intention. As long as there is a huge amount of inflation in the United States, that will be a continuous issue.

It may also be worth noting that the market had recently bounced from the 50% Fibonacci retracement level, so that is something that a lot of technical traders will pay close attention to. Beyond that, the ¥127.50 level was where that 50% Fibonacci level showed up, and of course it’s also an area that previously had seen support. With all that, it’s very possible this may remain a “buy on the dips” type of market.

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