USD/JPY Forecast: USD Continues To See Uptrend Despite Noise Against Yen

US dollar dipped against yen before PCE data. Expect uptrend to continue. Buyers may reemerge post-data, eyeing 150 yen level. Support at 50-day EMA and 147.33 yen. Recovery likely despite potential declines due to interest rate differentials. No shorting interest for now.

  • As we awaited PCE data and, of course, whether or not value hunters will reenter the market as they have on previous dips, the US dollar is retreated early in Thursday's trading session against the Japanese yen.
  • This is a market that will eventually offer a lot of value, but time will tell when that is.

When looking at the US dollar to the Japanese yen, it can be seen that, ahead of the important PCE data on Thursday, the US dollar declined pretty sharply during the trading day. Regardless, the market is likely to remain extremely noisy, primarily because it has been in such a strong rise for such a long time. As a matter of fact, for the past two years, I have followed a few more dependable markets than this one. It remains to be seen if that holds true, but as things stand at the moment, I do believe that eventually the general uptrend will continue to reassert itself despite any significant problems.

For what it is worth, the PCE number came out as expected, and therefore we could see a bit of noise as a reaction, but I still think the buyers will reemerge latter down the road. I have no interest in shorting this market anytime soon.

 

The 150 Level Matters

(Click on image to enlarge)

USD/JPY Forecast Today 1/03 - USD Continues to See Uptrend (Chart)

If everything else is equal, it appears that a lot of people will be concentrating on the 150 yen level. This is primarily because the market has been impacted by a big round number as well as the fact that there has historically been a lot of resistance in this general vicinity. Therefore, it doesn't come as a major surprise to me that there will almost certainly be a large number of buyers for any dip. Both the 50-day EMA and the 147.33 yen level are below, and I believe they provide a good deal of support. Furthermore, I believe that many people will be eager to seize the opportunity.

The 200-day exponential moving average may be tested if we were to break below all of that, but right now it doesn't seem like a big deal. The PCE data, which are the Federal Reserve's primary and most preferred indicator of inflation in the United States, will be released. Naturally, this will be closely watched. Having said that, I believe that even in the event of a decline, it will not be long before we recover and locate purchasers because of the enormous difference in interest rates.


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