USD/JPY Forecast Video for 03.03.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the trading session on Thursday, as we are threatening to reach the ¥137.50 level sometime soon. This is an area that has been important resistance previously, as well as important support, so it should not be a huge surprise that we would be attracted to it. The 50-Day EMA sits well below the market but looks as if it’s ready to cross the 200-Day EMA which would trigger the “golden cross indicator” that a lot of longer-term traders pay so much attention to.

Pullbacks at this point in time should continue to see support near the ¥135 level, as well as the 200-Day EMA, so any pullback at this point in time will more likely than not be short-lived in nature and thought of as a potential buying opportunity. It looks as if the trend has turned higher again, and it is probably worth noting that we formed a bit of a double bottom down at the 50% Fibonacci level from the big move higher.

That doesn’t mean that it’s going to be easy to break higher, and occasionally we will see a lot of noisy behavior. In fact, I think that we are in one of those phases, but it’s worth noting that the Friday candlestick was a massive shot higher, and we haven’t even broke down below the bottom of it.

In other words, there are a lot of people looking to get involved here, so I think I look at this through the prism of a “buy on the dip” type of market, and I think that continues to be the case going forward as there are so many reasons to believe that the Japanese yen will continue to get hammered. In fact, it’s not until we break down below the ¥132.50 level that I would consider the upward move starting the short the pair. Ultimately, this is a market that should end up going much higher over the longer term, but it does not necessarily mean that it’s going to be easy to get the higher prices.

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

This article was originally posted on FX Empire

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