Yahoo Finance USD/JPY Forecast – US Dollar Pulls Back
USD/JPY Forecast Video for 31.05.23
US Dollar vs Japanese Yen Technical Analysis
The US dollar has pulled back during trading on Tuesday as the overstretched condition may have gotten the better of the pair. That being said, the market is more likely than not going to continue seeing buyers given enough time. After all, the interest rate differential between the Americans and Japanese is extraordinarily wide, and that will continue to be one of the most important reasons why the market moves. If we do pull back from here a little bit more significantly, I would anticipate that the market will go looking to the ¥138 level, an area that was the top of the ascending triangle we had recently broken out of.
Remember, the measured move of that breakout reads for the pair to go as high as ¥148, which would obviously be a big deal. At that point, then we have to see whether or not resistance can hold. Ultimately, I do think that we will reset level but it doesn’t necessarily mean that we will reset level overnight. With that in mind, be somewhat cautious but recognize that shorting this market is still very dangerous to say the least. After all, it’s been a very noisy affair in general, I think that will probably continue to be the case going forward. The market will continue to be volatile, but if you’re patient enough you should get a nice set up to start going long yet again.
The interest rate differential between the 2 economies continues to widen with no change in sight. With that being the case, I just don’t see why you would short this market for any significant amount of time. If you stand back and let the market do its thing, it should offer value in the greenback, which of course you should be taking advantage of. Underneath, the 50-Day EMA is racing toward price, but is all the way down at the ¥136 level. It does make sense that we have this pullback, because quite frankly we have been a bit parabolic over the last couple of weeks, something that can’t last forever.
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This article was originally posted on FX Empire