USD/JPY Forecast Video for 07.06.23
US Dollar vs Japanese Yen Technical Analysis
The US dollar initially tried to fall against the Japanese yen during the trading session on Tuesday, but then turned around to show signs of life again. By doing so, the market ended up showing more of a “buy on the dip” mentality, therefore allowing the market to go looking to the ¥141 level above, which was where we pulled back from a couple of weeks ago. Breaking above that level then opens up the possibility of a move to go much higher. Ultimately, I do think that happens and therefore this recent pullback to test the top of the ascending triangle that had been so important in this market for so long. I do think that we do see plenty of upward momentum over the longer term, so I remain very bullish of this pair.
This will be especially true if next week the Federal Reserve decides to raise rates again or sounds hawkish in general. If they do, then we could see this market go much higher. Ultimately, if we do break above the ¥141 level, I think it becomes more or less a “buy-and-hold” market. Ultimately, at that juncture it’s likely that we could go looking to the ¥148 level. The ¥148 level is the “measured move” of the ascending triangle so that then becomes my target.
On the other hand, if we were to break down below the ¥130 level, then we could test the 50-Day EMA. The 50-Day EMA of course is a technical indicator that a lot of people pay close attention to, so therefore it does make a lot of sense that it could offer a little bit of a moving floor. Breaking down below that would of course be very negative, but I just don’t see that happening unless of course the Federal Reserve surprises with its interest-rate statement or perhaps its future outlook. If that’s the case, then just about anything can happen obviously, but right now it seems as if we are more likely than not going to see a lot of choppy behavior more than anything else.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire