US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar has pulled back a bit during the trading week to break down below the ¥132.50 level but found plenty of buyers on Friday as the Bank of Japan overnight had suggested that they are more than willing to continue fighting interest rates. This quantitative easing makes the Bank of Japan the only major central bank in the world doing that at the moment. (That being said, there are other ones that may have to do it shortly as well.)
The trend has been very strong for quite some time and is obvious. The fact that we fell a bit does make sense as sooner or later gravity had to come into the picture. If we break above the high price, then it’s likely that this market will break above the ¥135 level and leave it in the rearview mirror. Looking at this chart, it’s not until we break down below the ¥125 level that I would be concerned about the overall trend, which is so far away it’s not even a thought at this point.
The Federal Reserve has reiterated its desire to tighten interest rates over the next couple of meetings, so until then changes, I cannot see a scenario where this pair drops for any significant amount of time. With that being the case, DIPs will continue to be bought into, and eventually, we should go much higher. The fact that the Bank of Japan is ignoring this, or at least acting like they are, gives the “green light” for this pair to go much higher.
USD/JPY Price Forecast Video 20.06.22
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This article was originally posted on FX Empire
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