USD/JPY Weekly Price Forecast – US Dollar Recovers From a Minor Support Level

Published: May 13, 2022, 14:41 UTC•2min read

The US dollar has fallen during the week, testing the ¥127.50 level. We have bounced from there, to show signs of life as we are going to look to the ¥130 level again.

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USD/JPY

+1.79

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has had a rough week against the Japanese yen, but when you look at the trend we are obviously seeing a pullback that was desperately needed. At this point, I would not be surprised at all to see this market go back and forth, attempting to digest some of the froth. The market has been so overdone that we could even get a significant pullback at this point. Quite frankly, that would be the healthiest of things that we could see.

That being said, we may form a range more than anything else. If we break down below the ¥127.50 level, then it is possible that we could go to the ¥125 level. Any break below there could send this market down to the ¥120 level. Quite frankly, this market has been so overbought that a nasty pullback is almost certain to happen sooner or later. That is not to say that I would be looking to short this market, just that if you wake up one day and there has been a brutal selloff, you may want to get out of the way.

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From a longer-term standpoint, unless the Bank of Japan changes its attitude, it is almost impossible to imagine that the yen is going to show any strength. This is especially true against the US dollar as the Federal Reserve is so hawkish at the moment. All things being equal, this is a market that should continue to be thought of as “buy only”, but it is difficult to chase this market all the way up here.