USD/JPY Weekly Forecast – US Dollar Plunges Against Yen
USD/JPY Forecast Video for 05.12.22
US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar has plunged against the Japanese yen during the bulk of the week, but the Friday session was a completely different scenario as the jobs number came out much hotter than anticipated. With that being the case, you should not be surprised to see that the ¥135 level has offered a bit of support. Furthermore, you can see that on the weekly chart we had seen a little bit of support and resistance in that general vicinity, so I think it does make sense that this could be an area of interest. Whether or not hold for the longer-term remains to be seen, but clearly, we have oversold the US dollar, at least in the short term.
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When you look at this chart, you can see clearly that it has been very noisy for a while, so it’s not a huge surprise to see that perhaps we had to at least slow down the rate of descent, if not turn it around completely. A lot of this is going to come down to the overall attitude of the markets in general, because if we start to see the US dollar strengthened quite drastically, then it’s possible that it will show up in this pair as well.
Keep in mind that the Bank of Japan continues its yield curve control, so a lot of what you are seeing here is going to be a reaction to the bond markets worldwide. If yields start to rise again, then it puts a lot of pressure on the Bank of Japan. If they drop, then the yen can get a little bit of traction against the dollar again.
For a look at all of today’s economic events, check out our economic calendar.