USD/JPY Weekly Forecast – US Dollar Bounces for the Week

USD/JPY Forecast Video for 06.02.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has gone back and forth during the trading week, as we initially plunged, but then turned around to show signs of life. At this point, the jobs number has caused a huge move higher, with the announcement of 517,000 jobs added, instead of the expected 188,000. This has been a very noisy week, as the market chose not to listen to Jerome Powell, but now suddenly has to think about this. That being said, what I am paying the most attention to is the inverted hammer from the weekly candlestick previous, because if we break above there then I think we have a real shot at continuing the upward momentum.

On the other hand, I do think that there is a massive amount of downward pressure over the last couple of months that still has to be dealt with. The ¥127 level underneath is massive support, so if we were to break down below there, I believe that this market hits a big air pocket, sending this pair all the way down to the ¥115 level before it is said and done.

All things being equal, this is a market that I do think is trying to fight back, so if we get an impulsive week, that could change the trend right back to the upside again and I think we are certainly going to be a situation where the volatility is going to pick up, and this next week should be rather important for the future directionality of this currency pair over the next 6 months or so. At this point, caution is the better part of valor, but it certainly looks as if we are trying to turn things around.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire