US Dollar vs Japanese Yen Technical Analysis
The US dollar initially pulled back a bit during the trading session on Monday but then turned around to show signs of strength again. We have been in a very strong uptrend, and it suggests that we are going to continue to see more of the same. Ultimately, I think that traders are going to look at this as a situation where they will be jumping in to buy dips. The situation in this market is essentially a “one-way trend”, for multiple reasons.
The pair continues to look at every 250 pips as potential support or resistance level, so the ¥127.50 level is an area that should offer support, just as the ¥125 level will underneath. The ¥125 level is currently being overrun by the 50 Day EMA, which is rising. The 50 Day EMA is more likely than not going to be thought of as a dynamic support level, and I believe that a lot of traders will look at it as such.
However, if we were to break it down below the ¥125 level, it could change a lot of the attitude in this market. On the other end of the spectrum, if we make a fresh, new high, then it will just simply be a continuation of the overall uptrend. In the short term, it is very likely that we could grind sideways in order to work off some of the excess froth in this market.
As long as the Bank of Japan continues to fight interest rates rising in that country, it is essentially going to be a situation where the Japanese yen will continue to get hammered against almost all currencies while that is the case, especially with the Federal Reserve on the other side of this trade tightening monetary policy.
USD/JPY Price Forecast Video 17.05.22
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This article was originally posted on FX Empire