USD/JPY Weekly Forecast – US Dollar Has a Strong Week

USD/JPY Forecast Video for 20.02.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has rallied during the course of the week to test the ¥135 level. The ¥135 level of course is an area that has been important multiple times, so it’s not a huge surprise to see that we have failed there. Nonetheless, the overall candlestick is rather bullish looking, and therefore I think we probably have a little bit of follow-through coming. After all, if the Bank of Japan continues to have to fight interest rates, it’s likely that we will continue to see the US dollar overcome the Japanese yen strength. We also had recently pulled back from the 50% Fibonacci retracement level, and now it looks like we are ready to go to the upside again. Given enough time, I do think that we probably have a much higher exchange rate.

If we can break above the ¥135 level, then it is possible that we could go to the ¥137.50 level. After that, the ¥140 level is worth paying close attention to. On the other hand, if we turn around and break down below the ¥130 level, that would probably show quite a bit of negativity, perhaps opening up the possibility of a move down to the ¥127.50 level. You can see that the pullback was rather brutal, but then again, the move higher was brutal to get up there. Now that the Federal Reserve may finally be convincing people that they are serious about keeping interest rates higher for longer, we could very well see this market take off to the upside. Ultimately, this is a market that remains very noisy, but I do think given enough time we probably try to get back to those highs at this rate.

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