US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar has risen considerably over the week, while we continue to see the Japanese yen implode. After all, the Bank of Japan is in a situation where it needs to keep interest rates low and despite the occasional jawbone or perhaps even intervention, the reality is that it’s all about the Federal Reserve. The Federal Reserve will likely keep things tight and perhaps, and this may be a huge, rate cut just once this year.
If that is the case, then I think the interest rate differential will continue to attract many traders to this market. I’ve been a lifetime long of almost every yen-denominated pair, but honestly, the fundamentals just don’t change. Yes, we intervened, but in the end it became a blip on the radar and we are about to maybe take the top of that candlestick out.
If we break the 160 yen level, it will be a huge test. Even if they came in and intervened a bit, I would just buy it at a lower level. I get paid at the end of every day to maintain this market, and I think that’s what most people focus on. As long as inflation is a problem in the United States, the US dollar will absorb a lot of currency. And if you look at Asia, because I do some work with the exotics, other currencies like the Singapore dollar, the Thai baht, the Chinese yuan and the Korean won, they’re all suffering at the hands of the dollar, so it’s hard to believing that the yen would be different.
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This article was originally posted on FX Empire
