(MENAFN- Daily Forex) The USD/JPY displayed limited activity during the trading session, a reflection of the banking holiday in Japan. Simultaneously, market participants are on edge, anticipating the upcoming FOMC meeting on Wednesday, with expectations of heightened volatility over the next couple of days. Presently, a short-term pullback seems reasonable, but the market's focus remains squarely on the critical ¥147.80 level, acting as a formidable barrier. Forex Brokers We Recommend in Your Region 1 Read full review Get Started A potential breakout beyond this pivotal level could pave the way for a move towards the psychologically significant ¥150 mark. While ¥150 holds considerable psychological significance, it's noteworthy that this area has been breached before, potentially diminishing its significance.In general, this is a market where buying on dips has proven to be a sound strategy, even though we've seen limited opportunities for such dips in recent days. It's highly likely that the market will eventually seize the opportunity to acquire US dollars at more favorable rates, particularly as the Bank of Japan is unlikely to make any substantial changes to its monetary policy. While they may attempt to influence the yen's value through verbal intervention, a significant pullback remains improbable, especially given the notable policy gap between the Bank of Japan and the Federal Reserve.The market is Anticipating the FOMC Meeting
Nevertheless, we should be prepared for potential volatility, especially on Friday when the Bank of Japan communicates its stance. Despite the noise surrounding this market, there's a growing belief that it will eventually break out, primarily due to its resilience in recent attempts at a breakout. The 50-day Exponential Moving Average (EMA) sits closer to the ¥145 level, serving as a short-term "floor" in the market's current dynamics. However, it's worth noting that Monday and Tuesday may see subdued activity as market participants await the pronouncements of Jerome Powell. In conclusion, the US dollar's recent performance against the Japanese yen reflects the anticipation surrounding the FOMC meeting and the banking holiday in Japan. The pivotal ¥147.80 level remains in focus, with a potential breakout paving the way for a move towards ¥150. Buying on dips remains a prudent strategy in this market, considering the policy disparity between the Bank of Japan and the Federal Reserve. While potential pullbacks may occur, the prevailing sentiment leans towards an eventual breakout, supported by the market's recent resilience. The presence of the 50-Day EMA provides additional support, further underscoring the potential for a more favorable entry point.
Potential signal: Buying this market on dips still. The 146.55 level is where I will be buying this pair. I would leave a wide stop this week, though, as the Bank of Japan is going to have its meeting early Friday. This means a 200 point stop. As for the target, we are likely to see an attempt to reach 151. Ready to trade our daily Forex forecast ? Here's a list of some of the best regulated forex brokers to check out.
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