US Dollar vs Japanese Yen Weekly Technical Analysis
The US dollar has been very volatile during the trading week, initially dipping down to the ¥127.50 level before shooting straight up in the air again. The market had broken above the 1.30 level before pulling back just a bit. At this point, I think we continue to see a lot of volatility more than anything else, so I think you need to be cautious about what you do next. Ultimately, this is a market that will continue to be very noisy, but we are getting a bit overstretched.
The Bank of Japan has signified that they are more than willing to buy unlimited bonds to keep interest rates down. This means that they are essentially “printing yen”, which means that in theory, the market could continue going higher forever. It will not obviously, but at this point, it looks as if the BOJ is not willing to get involved, so therefore this market has a clear path higher. However, we will have gravity come back into the picture occasionally, which is something that we had seen earlier in the week. I think dips should be thought of as buying opportunities, but to chase the trade all the way up here would be a bit reckless, to say the least.
If we break down below the ¥127.50 level, then it is likely we go looking to the ¥125 level. The market has been shot straight up in the air for quite some time, so it is only a matter of time before we see a little bit of an exhaustion move that will probably catch most participants off guard. Be cautious, but look for value.
USD/JPY Price Forecast Video 02.05.22
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This article was originally posted on FX Empire
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Source: https://finance.yahoo.com/news/us-dollar-continues-massive-move-150625992.html