USD/JPY Forecast – US Dollar Pierces 200-Day EMA

USD/JPY Forecast Video for 16.02.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the trading session again on Wednesday to pierce the 200-Day EMA against the Japanese yen. By doing so, it is threatening a trend change, and I do think that it’s becoming increasingly obvious that we are in the midst of one. That being said, it doesn’t mean that it is necessarily going to be easy to change the trend, but I do think that traders are starting to reassess the idea of yield curve control in Japan.

Remember, every time the 10 year JGB gets close to 50 basis points, the Japanese have to print yen in order to buy all of those bonds. If we can take up to the upside, the ¥135 level is an area that I think we target, as it had been previous resistance and of course it is a large, round, psychologically significant figure. Underneath, we have the ¥132.50 level, where we had launched from previously. Ultimately, this is a situation where you will continue to see the buyers on dips, therefore I think we will continue to see a lot of interest. This will be especially true now that the US has printed it a hotter than anticipated inflation number on Tuesday, and a hotter than expected retail sales number on Wednesday.

If we do break down below the ¥132.50 level, then it’s possible that we could go to the ¥130 level. The ¥130 level is a large, round, psychologically significant number, and an area where we have seen a lot of buyers jump into this market. I do think that we break much higher, but it might be a bit of a bumpy ride on the way out.

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