USD/JPY Forecast Video for 01-02-2024

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US Dollar vs Japanese Yen Technical Analysis

The US dollar has gone back and forth during the course of the trading session on Wednesday as we wait for the FOMC meeting. The most important part of the meeting will be the press conference because, quite frankly, nobody is expecting an interest rate cut. So, if we were to see some type of interest rate move, that obviously is going to throw the markets into chaos. The Federal Reserve has shown its proclivity to keep Wall Street profitable and therefore they do not want to shock the market any more than they would have to. When I look at the chart, it’s easy to see that there is a lot of consolidation in this area just above the 147 yen level, and therefore, I think that is a short-term bottom. Breaking down below there then brings into play the 50-day EMA and then eventually the 145 yen level, which is a major figure that a lot of people will be paying attention to due to previous action and of course the fact that it is a large, round, psychologically significant figure.

On the upside, we have the 148.80 yen level, and then the 149.80 yen level. All things being equal, this is a market that is looking for some type of direction from the Federal Reserve because that will be the next catalyst. The Bank of Japan is obviously going to be a situation where they won’t do anything to move monetary policy and therefore the Japanese yen should have no real reason to rally anytime soon, at least not for a longer term move.

I think the Japanese yen is something that people don’t want to own and even if you aren’t trading this pair it serves as a good technical indicator for the idea of a situation where if the yen fails to show signs of strength, then you could see other higher alpha currencies will do really well against it, such as the Aussie dollar, the New Zealand dollar, the British pound, etc, etc.

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