US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar continues to see upward pressure against the Japanese yen, which does make quite a bit of sense considering that the market is one that pays you at the end of every day. After all, the interest rate differential between the United States and Japan remains very strong. And it’s probably worth noting that on Friday, we got a jobs report that was slightly stronger than anticipated. So it just shows that we are nowhere near interest rate cuts. And therefore, I think we will continue to see upward pressure.
Short-term pullbacks are definitely going to be thought of as potential buying opportunities, and it’s worth noting that the 160 yen level is a large round psychologically significant figure that sits just below, but it’s also where the Bank of Japan had intervened. Because of this, I think there will be a certain amount of market memory there, so I would anticipate seeing some action if we do pull back to that area. Even if we break down below there, I see multiple support levels, not only on the weekly, but also the daily charts.
I do believe eventually we will go looking to the 165 yen level, but it’s going to take some time. We are stretched and we may need to pull back occasionally. Those should be opportunities that you’re willing to take advantage of. I have no interest whatsoever in trying to short this pair. Ultimately, this is a pair that a lot of people are still clinging to, and I don’t see that changing anytime soon.
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This article was originally posted on FX Empire
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