USD/JPY Price Forecast – US Dollar Bounces From the Crucial ¥135 Level

US Dollar vs Japanese Yen Technical Analysis

The US dollar has fallen initially during trading on Friday to test the ¥135 area. This is an area that had previously been both supported and resistant, so it should not be a surprise that we have bounced again. Ultimately, we are in an uptrend for multiple reasons, not the least of which will be the Bank of Japan and its incessant attitude when it comes to bond yields in Japan. As long as they continue to buy unlimited bonds, that’s the same thing as printing money, thereby flooding the system with Japanese Yen.

Furthermore, the Federal Reserve is overly hawkish, so this makes this more or less a “one-way bet” over the longer term. Yes, there will be the occasional pullback, but I do not think that it will amount to much, as we have seen every pullback bought into. The ¥135 level obviously is supported, but so is the ¥132.50 level, the 50 Day EMA, and then finally the ¥130 level. We could fall for all of that and still technically be an uptrend, so at this point, you should not be looking to sell this pair. Instead, you should be looking at this through the prism of “buying on the dips” and being able to pick up US dollars “on the cheap” every time it pulls back.

Until the Bank of Japan changes its attitude, or the Federal Reserve does, this is apparent that will continue to go higher over the longer term. I have no realistic scenario in which I am a seller unless there is some type of massive panic in the markets that have everybody buying yen. That is possible, but let’s be honest here: this market has had plenty of opportunities to do that.

USD/JPY Price Forecast Video 04.07.22

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