US Dollar vs Japanese Yen Technical Analysis
The US dollar has fallen back a bit during Tuesday’s trading session, but it looks like we’ve seen a little bit of support return at this point. That makes quite a bit of sense, considering that the interest rate difference between the US dollar and the Japanese yen is enormous. The Bank of Japan has absolutely no option to raise rates for any length of time because, frankly, Japan’s government debt is so radically high that it cannot raise rates without destroying the economy. At the same time, the Federal Reserve has to worry about inflation in the United States, which is why interest rates may stay higher for longer.
That said, I think this is a scenario where you come in and pick up every dip. That’s been the case for months, and I just don’t know how it would have changed in the last 24 hours. Yes, we may be a bit overextended, but if we can blow through the 160 yen level, it’s entirely possible that we could see this market fully take off in the next phase we target.
Other yen-related pairs have done so. So it’s probably only a matter of time before the US dollar follows suit. Below that we have the 50 day EMA, we have the 155 yen level, and even above that we have the 158 yen level, all of which provide support. In other words, there are plenty of areas where buyers could return to this market and rise again.
Check out our economic calendar for an overview of all today’s economic events.
This article was originally posted on FX Empire
