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USD/JPY Forecast – US Dollar Continues to Look Bullish

USD/JPY Forecast Video for 12-02-2024

US Dollar vs Japanese Yen Technical Analysis

The US dollar initially fell against the Japanese yen on Friday, but it does look like we are turning around to show signs of life again. At this point, I suspect that the dollar is trying to get to the 149.80 yen level, an area that previously had been resistance as this is a market that is obviously very bullish. Ultimately, the Bank of Japan is nowhere near tightening monetary policy and therefore the Japanese yen is being sold off against almost everything. This is true not only with the US dollar, but the British pound, euro, Canadian dollar, etc.

On the other side of the trade, you have the Federal Reserve and although they are more likely than not going to be putting raids sometime in 2024, it looks like the timeline has been pushed back, so traders continue to enjoy a positive swap at the end of the day by holding this currency pair. Underneath, we have the 147.50 area as support, the 147.33 level as support, and then again, we have the 50-day EMA as support. So, I welcome any pullback as a potential opportunity to pick up cheap US dollars. I think that continues to be the play going forward and therefore you need to see value to take advantage of.

That being said, it’s probably worth noting that the Thursday candlestick was extraordinarily impulsive to the upside, and therefore it does make a certain amount of sense that we would continue to go higher. Once we break the 149.80 yen level, I think the next target is going to be closer to the 152 yen level, which is a major swing high. Anything above there becomes more or less buy and hold, but quite frankly, you could probably say that about the market at the moment anyway. It’s been a pretty strong run as of late, but we recently formed a bullish flag and have come nowhere near hitting the projected target of that flag as well. So that might be yet another reason to think we go higher.

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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