Yahoo Finance USD/JPY Forecast – US Dollar Rallies Against Yen
USD/JPY Forecast Video for 20.12.23
US Dollar vs Japanese Yen Technical Analysis
The US dollar has rallied against the Japanese yen during the trading session on Tuesday, touching the ¥145 level rather quickly. This was mainly due to the Bank of Japan reiterating that they would ease monetary policy if necessary, blowing the idea of a rate hike at the next month meeting out of the water, suggesting that normalizing policy still is not something the Japanese can do.
In general, this is a situation where I think you continue to see buyers on dips, as the ¥145 level being broken to the upside opens up the possibility of a move to the 50-Day EMA. For myself, I think you’ve got a situation where the Japanese yen continues to get eviscerated, but it will be especially so against other currencies, not just the US dollar. In fact, if you are trying to take advantage of Japanese Yen weakness, you will probably do better in the GBP/JPY pair, or perhaps even the NZD/JPY pair.
Underneath, the ¥142 level is an area of support, and of course we have an uptrend line underneath that should continue to offer support as well, so at this point in time I think you continue to have more or less a “buy on the dips” scenario, but the next week or 2 might be a little bit noisy due to the fact that we are looking at this through the prism of a market that has a lack of volume affecting it. If we can take out the ¥145 level, then I think we took a liking to that 50-Day EMA, but that might be a story for January, although a lack of liquidity could make that happen suddenly.
Regardless, I don’t have an interest in shorting this market, at least not at the moment. Short-term choppiness and base building might be what happens over the next couple of weeks, but ultimately it will be interesting to see whether or not the market picks up any momentum between now and next year, or if it takes a little bit of churning to get past this massive selling pressure. Another thing to keep in mind is that we are above the 200-Day EMA.
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This article was originally posted on FX Empire
