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USD/JPY Price Forecast – US Dollar Finds Support

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US Dollar vs Japanese Yen Technical Analysis

The US dollar has found a little bit of support at the ¥127.50 level, an area that of course has been important more than once. Ultimately, this is an area that I think buyers are looking to get involved in, perhaps kicking off another consolidation area. After all, the market is extraordinarily bullish and probably needs to work off some of the excess froth. Furthermore, the fundamentals still line up for the US dollar to be stronger, but again, if you are overbought, you are overbought.

Even if we do break down from here, the 50 Day EMA is near the ¥126 level, and the ¥125 level underneath there should offer quite a bit of support as well. It is not until we break down below the ¥125 level that I would start to look at a much deeper correction. However, as the Federal Reserve continues to be very hawkish, and the Bank of Japan continues to fight rising rates, it sets up for a bit of a “perfect storm” for this pair to continue looking bullish.

The one wildcard out there would be the speech of the Federal Reserve, especially if it changes. After all, they suddenly sound like they are a little bit more open to accommodative policy, is very possible that we could see this whole thing turn around. I do not know that I expect that to happen anytime soon, but it is a possibility for derailment. As things go now though, I would anticipate that there should be plenty of people willing to “buy the dips” going higher over the longer term. Volatility continues to be a major issue in this pair, just as it does in multiple other ones.

USD/JPY Price Forecast Video 23.05.22

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This article was originally posted on FX Empire


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