USD/JPY Forecast – US Dollar Threatens Resistance

USD/JPY Forecast Video for 22.02.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the trading session on Tuesday to threaten the ¥135 level. This is an area that has been both support and resistance recently, and therefore will have a certain amount of market memory attached to it. Furthermore, the market also is taking into account the Bank of Japan and its yield curve control, recognizing that in order to see yields in the 10 year Japanese Government Bond stay underneath 50 basis points, they may have to buy an unlimited amount. In order for the central bank to buy an unlimited amount of bonds, that means they will have to print currency. By doing so, they flood the market with Japanese yen, driving down the value of it.

Underneath, we have the 200-Day EMA, and the 50-Day EMA indicator as well, looking very likely to cross over yet again. If we can stay above these 2 moving averages, it’s very likely that we will continue to see upward pressure. Eventually, if we can break above the ¥135 level, I suspect that this market is looking to the ¥137.50 level, an area that had seen a lot of selling pressure previously. Anything above there could open up the floodgates for a much bigger move.

At this point, it looks as if the trend is in the process of changing, but this is normally a very messy affair, especially when it involves the Japanese yen. That being said, I still think this has a bit of a “buy on the dips” feel to it, so therefore I will be looking for signs of pullbacks that have buyers coming back in to support the market.

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