USD/JPY Forecast – US Dollar Plunges Against Japanese Yen

USD/JPY Forecast Video for 13.01.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has fallen rather hard against the Japanese yen during the trading on Wednesday, plunging below the ¥130 level. The latest rumor is that the Bank of Japan is going to rethink its monetary policy, so people believe that they are going to allow interest rates rise even further. If that’s going to be the case, that obviously is very bullish for the Japanese yen, as interest-rate differential is a major driver of markets. That being said, we also had the Consumer Price Index coming out of the United States and that provided some fireworks as well.

Ultimately, the size of the candlestick is rather negative, so I think if we break down below it, then that means that we are going even further. We are most certainly a major inflection point yet again, and it’s probably worth noting that the “death cross” is getting ready to form, so we do continue to drop from here, I think that would be the beginning of something rather major. On the other hand, if we continue to hold this area, it could set up for some type of balance.

Quite frankly, you have to be cautious with these moves, because it’s all based on speculation of what somebody may or may not do. If the Bank of Japan doesn’t do what people think they’re going to do, then we could get a major turnaround. That being said, I do expect a significant move from here, so keep your position size reasonable but we should have some clarity rather quickly as traders sort out the facts.

For a look at all of today’s economic events, check out our economic calendar.