USD/JPY Forecast – US Dollar Shows Signs of Strength Against Japanese Currency

USD/JPY Forecast Video for 12-01-2024

US Dollar vs Japanese Yen Technical Analysis

And as you can see, the US dollar has rallied again against the Japanese yen. As we have seen quite a bit of noisy behavior, we initially pulled back to that 145 yen level where I thought we would see support and that’s exactly what we got. Now we have turned around to show signs of strength. At this point, I anticipate that the market will go looking to the 147.33 yen level, which would make a certain amount of sense due to the fact that interest rates continue to favor the US dollar.

Nonetheless, it is most certainly a market that is going to be very noisy, where short-term pullbacks offer value. The 200-day EMA has been held, so whether or not we can break out right away remains to be seen, but we certainly look as if we are in the process of trying to recover fully from what had been a rather significant breakdown.

That being said, I think we also have to look at this through the prism of the Bank of Japan not willing to do anything. The Japanese yen is a punching bag for most other currencies, and I think that probably continues to be the case going forward. Underneath, if we were to break down below the 200-day EMA, you could make an argument for a breakdown to 140 yen, but right now it looks like we’re nowhere near doing that, and with that being the case, I remain a buy on the dip type of trader when it comes to the dollar against the yen.

This is a pair that will continue to pay close attention to the interest rate differential, whose effect is very much intact at the moment despite the fact that rates have dropped a bit in the United States. The Bank of Japan not willing to do anything to tighten monetary policy will continue to be a major influence on what happens in this currency pair.

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