US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar plunged during a major portion of the week, but it looks like the 155 yen level is trying to hold out of support. This of course is a large round psychologically significant figure and an area that people will be paying close attention to. So, with that being said, it looks like we are going to do something along the lines of forming a hammer. If we can break above the top of the candlestick, then it could open up the possibility of a move to the 160 yen level. And then perhaps to the 162 yen level.
Clearing that of course just kicks off the next leg higher. And although the Bank of Japan continues to intervene occasionally, the reality is there’s only so much that they can do. After all, the debt level in Japan is so massive, the interest rates rising could just absolutely rumble the economy. Japan is essentially stuck.
And at this point in time, it looks like inflation continues to be an issue in the United States. So, rates are going to stay high in the US for a while. And even if we do get cuts, you’re probably talking about 25 basis points between now and the end of the year, which is not enough to change the overall fundamentals of this pair. The question now is more or less, are we going sideways for a while and then going higher or are we just going to turn around and go higher? I have no interest in shorting this market.
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This article was originally posted on FX Empire