USD/JPY Forecast – US Dollar Pulls Back Against The Yen

USD/JPY Forecast Video for 16-02-2024

US Dollar vs Japanese Yen Technical Analysis

The US dollar fell against the Japanese yen early during the trading session on Thursday to test the crucial 149.80 yen level. This is an area that previously has been resistant. So, a certain amount of market memory should come into the picture. And it makes sense that we are seeing buyers try to come back into the market in this general vicinity.

Ultimately, this is a play between two central banks that are widely opposed in their stance. Although the Federal Reserve is likely to cut rates in 2024, the Bank of Japan simply cannot tighten monetary policy. It’s almost impossible with the amount of debt that Japan has. As long as that’s the case, you do get paid to hang on to this pair. The swap at the end of the day is rather positive and now that it looks like the Federal Reserve may have to postpone rate cuts until later in 2024, you can get paid for even longer. I think this will be the story here in this currency pair over the next several months.

All things being equal, if we do break down below the 149.80 yen level, then we have the 147.33 yen level underneath, which was previous resistance and support, and it also has the 50 day EMA hanging about it. So, I think all things line up for an area of massive support even if we do break down. I have no interest in trying to short this pair.

I do think that it is probably only a matter of time before we not only go higher but break above that crucial 152 yen level that caused so much in the way of resistance previously. Anything above there, I think, probably opens up the door for a move to 155. The Japanese Yen is going to remain weak against most currencies and most certainly against the US dollar, as there are a lot of things right now favoring the greenback in general.

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