Exactly four weeks ago, I analyzed the US dollar to Japanese yen for you. Now it’s time for an update. At that time, my conclusion was that the currency pair had taken enough air from the massive resistance zone between 148.58 and 149.52 to break out upwards.

You can see this resistance zone inserted in light red in the following chart, as well as the uptrend channel in yellow. As the following chart shows, exactly what I had expected happened. Slowly but steadily, the light red resistance zone could be conquered. The currency pair even rose to almost 152 yen per US dollar at its peak.

It was exactly there that a high was formed at the beginning of the light red resistance zone in October 2022 (visible on the left in the figure). Then began a correction that lasted several months.

Figure 1: Chart analysis of the USD/JPY currency pair. The daily chart is displayed.

Source: aktienscreener.com

Will it happen again now, as it did between October 2022 and February 2023? The new downward movement caused the US dollar to Japanese yen to fall from almost 152 to 127.50 points.

Now the question arises whether we will see similar things until the new year. Unlike October 2022, the current upward movement is slow and constant, indicating that the current correction should only be interpreted as a pause.

Although the currency pair could still drop another 200 pips in the short term, this will only target the lower downward trend line of the yellow area. The uptrend remains intact even then.

Seasonally it should go up to mid-December Based on the usual seasonal behavior between November and the end of a year, such a movement is not to be expected. You can see the corresponding forecast line in the following figure 2. It shows a brief dip next week, followed by an upward movement lasting until mid-December.

Figure 2: Seasonal chart of the USD/JPY currency pair. The movement for the next 20 days is forecasted.

Source: forexbull.com

Conclusion: Currently there seems to be a stalemate in the currency pair USD/JPY. On the one hand, the currency pair has corrected significantly in the last week and could march another 200 pips south. On the other hand, seasonality based on the course data of the last 20 years points to an imminent low point, then it should continue in the old trend upwards.

Correction and positive seasonality suggests that both assessments could be correct. While short-term losses are still possible, a low point should soon be due and the currency pair should then move sideways at a high level in the near future. A plunge of 200 pips could therefore be a good opportunity to buy into the currency pair and open a long position to benefit from an upward movement to the year’s high so far.