US Dollar vs Japanese Yen Technical Analysis
You can see we initially did try to rally a bit during the trading session here on Thursday but gave back those gains to show signs of hesitation. That being said, I think this is a situation where you will eventually see a certain amount of buy on the dip behavior come back into the picture because quite frankly, this is a market that has a massive interest rate differential between the two currencies. So with that being the case, I think you have a situation where the 152 yen level is worth paying attention to as it is a major top that we made recently. If we can break above there, then it’s likely that we go looking to the 155 yen level. This is a market that I have no interest in shorting. I don’t care what the Bank of Japan says, does, anything else.
They are light years away from being able to really do anything when it comes to seriously tightening monetary policy. Point one percent interest rates are not anything to get overly excited about. That being said, if we do pull back to the 150 yen level, I would anticipate a lot of support in that area as it is not only a psychologically important figure, but it is also close to where the 50 day EMA comes into the picture. So I think a certain amount of momentum will be had there as well.
In general, this is a market that I think continues to see plenty of momentum. But ultimately, you’ve got a situation where you have to look at this through the prism of finding value. While the Federal Reserve is likely to cut rates later this year, they’re not going to cut them aggressively. And in fact, there are some people now starting to think that maybe they won’t cut them at all this year. And if that’s the case, this pair is going much higher.
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This article was originally posted on FX Empire
