USD/JPY Forecast: Pulls Back From The Crucial ¥145 Area
Date
9/29/2022 2:20:00 PM
(MENAFN- Daily Forex)
- The has pulled back just a bit during the trading session on Wednesday as we continue to see a lot of noisy behavior overall.
- After all, the bank of Japan has been involved in the market as of late, so that always makes for a little bit of nervous trading.
- The ¥145 level has been a crucial barrier to overcome, but it does not necessarily mean that it will be impossible.
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The ¥140 level underneath will be supported by the 50-Day as well, so it's yet another reason to think that the market is going to continue to go to the upside. Beyond that, you also must keep in mind that the Bank of Japan is still buying“unlimited bonds”, so at this point I think we've got a situation where the bank Japan will continue to flirt with the devaluation of the Japanese yen. US Dollar is Overbought
If we were to break above the ¥145 level, then it opens the possibility of going higher for a bigger move. At that point, the market is likely to see an attempt to get to the ¥147.50 level. After that, we also have the ¥150 level, and then it looks like that the market will have a big fight on its hands based upon the previous action.
On the other hand, if we were to turn around and break down below the 50-Day EMA, it's likely that the market could drop another 500 points, especially if the Bank of Japan gets its way. However, with the being very tight with its monetary policy, it does make sense that the US dollar should strengthen in general. In that scenario, it's very likely that we are going to see US dollar straight, but the US dollar is overbought at this point. This is just a simple function of the market, trying to catch his breath and decide that it can continue to go higher. Ultimately, this is a market that I think will continue to see chop, but I still favor the upside in general, although you need to be concerned about violent moves to the upside, since the Bank of Japan will do what it can to stem those moves. However, the long run, central bank actions typically do not change trends.
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