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USD/JPY Weekly Price Forecast – US Dollar Pulls Back Drastically
By: Christopher Lewis
Updated: Jul 7, 2023, 12:43 EDT • 2min read
The US dollar sold off quite drastically on Friday, forming a rather negative candlestick for the week as the Non-Farm Payroll numbers came in lighter than anticipated.
US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar has fallen rather hard during the course of the trading week, especially on Friday as the Non-Farm Payroll announcement came out at 209,000, as opposed to the 225,000 expected. Furthermore, it’s worth noting that the previous month had been revised down as well. Because of this, traders are starting to attempt to bet on the idea that the Federal Reserve is going to change its trajectory, which of course is complete nonsense. However, the market is a little overextended so it does make sense that we can see a bit of profit taking at the first signs of trouble.
Underneath, we formed a massive bullish flag on the daily chart, which means that somewhere near the ¥140 level, and therefore I think that could be the bottom of the overall pullback. All things being equal, I am looking for a bit of value, and that value I will take plenty of advantage of. With that being the case, it is probably only a matter of time before you get the opportunity to start going along again, especially as the swap remains positive for owning this pair, as the Bank of Japan continues to see plenty of reasons to keep its monetary policy loose. As long as that’s the case, and the fact that the Federal Reserve is rather tight, it is very likely that we will see more upward pressure than down, although markets don’t go in one direction forever. All things being equal, I look at any dip as a bit of an opportunity that people will be more than willing to take advantage of.
For a look at all of today’s economic events, check out our economic calendar.
Source: FX Empire
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