Yahoo Finanza USD/JPY Forecast – US Dollar Continues to Find Buyers on Dips
USD/JPY Forecast Video for 16.10.23
US Dollar vs Japanese Yen Technical Analysis
The US dollar has pulled back during the trading session on Friday, but then turned around to show signs of life. The ¥150 level above is a significant amount of resistance just waiting to happen, and therefore you need to pay close attention to it. If we break above there, then it’s likely that we will have a massive short covering rally, and the US dollar will probably go racing against the Japanese yen at that point.
It does make a certain amount of sense that we would see that happen, due to the fact that the interest rate differential continues to favor the United States well over Japan. The Bank of Japan continues to keep quantitative easing in full tilt, meaning that the Japanese yen will continue to suffer at the hands of other currencies around the world. After all, you get paid to hold this pair to the upside.
Short-term pullbacks at this point continue to attract buyers, and I think there’s a certain amount of a “floor in the market” near the ¥147.80 level. The 50-Day EMA is racing toward that area, showing signs of life in that region as well. Quite frankly, there’s no scenario where I want to short this market, and therefore if we do pull back, then I start looking for signs of a bounce that I can get involved in.
Expect a lot of noisy behavior, and perhaps even some consolidation in this region, but there’s no reason to think that anything changes. This is a market that’s been bullish for quite some time, and I just don’t see how that changes as the Federal Reserve is going to stay “higher for longer”, while the Bank of Japan can only jawbone the market down occasionally, because Japan has far too heavy of a debt burden to raise rates. Quite frankly, they can’t afford to do it, but at the same time they have to accept the fact that the currency is going to be absolutely eviscerated due to that central-bank policy.
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This article was originally posted on FX Empire
