Category: Forex News, News

USD/JPY Forecast – US Dollar Drifts Lower Against Japanese Yen

USD/JPY Forecast Video for 06.04.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has drifted a little bit lower against the Japanese yen during the trading session on Wednesday, as it looks like we are continuing to look for some type of floor in this market. Alternatively, the market is paying attention to the 50-Day EMA above, as it has offered a bit of dynamic resistance, right along with the 200-Day EMA just above it.

Underneath, the ¥130 level is an area that offers a certain amount of psychological support, and we have seen the market bounce from there recently. The market formed a hammer the last time we got down to that area, to see the market bounce towards those moving averages. On the other hand, if we were to turn around and break above those moving averages, that would obviously be a very bullish sign, and open up the possibility of going to the ¥135 level.

On the other hand, if we were to turn around and break down below the hammer that we bounced from that ¥130 level, then it opens up the possibility of the market testing the ¥127.50 level, where we had formed a bit of a double bottom. Breaking down below that level then opens up the possibility of a move down to the ¥125 level. That would also be yet another large, round, psychologically significant figure that a lot of people would be paying attention to.

Keep in mind that the Bank of Japan continues its yield curve control situation, trying to keep the 10 year JGB down to 50 basis points. Having said that, there were remarks overnight from a Bank of Japan official that perhaps they could abandon that as the interest rate situation seems to be calming down. That being said, it’ll be interesting to see how this plays out over the longer term, but we are most certainly getting very close to a major support level that should have an effect on the market. Ultimately, this is a situation where you will have to pay close attention to the bond markets, and of course the overall strength of the US dollar itself.

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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