USD/JPY Forecast Video for 13.02.23
US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar has gapped higher to kick off the trading week on Monday, and then spent the rest of the week filling in the gap in building up a bit of a base. At this point, one would at the very least expect it to bounce as it fell so hard, but you will notice that on the way up it did the exact opposite, so it’s likely that we will continue to see a lot of noisy behavior and therefore volatility probably picks up.
Ultimately, I think this is a situation where you have a lot of volatility, but I do think that as the Bank of Japan has to continue keeping its yields down, this will come down to the bond market more than anything else. As yields rise, the Japanese will be forced to print more currency, which of course is bad for the value of that currency.
On the other hand, if the rates around the world were to fall overall, that typically will work in favor of the Japanese yen as it is a lower yielding currency anyway, and of course the Bank of Japan will have to print less. It’s a simple supply and demand situation. Looking at this chart, I can see that the ¥132.50 level is significant resistance and then after that we could go to the ¥135 level.
Underneath, we have a massive amount of support near the ¥127.50 level, which extends about 50 pips underneath. If we were to break down below there it would open up a massive “air pocket” in this pair. At that point, I would expect to see a huge flush lower.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
More From FXEMPIRE:
Source: https://finance.yahoo.com/news/usd-jpy-weekly-forecast-us-150625442.html