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MENAFN- Daily Forex)
The US dollar was very stout during the trading session on Thursday as we have now broken above the crucial 150 yen level. The 150 yen level has been a headache for a couple of weeks now and now looks as if it is going to be in the review mirror. If that's the case, this is a market that will continue to rally and strengthen over time. Keep in mind that we look at the yen through the lens of the carry trade.
Because of this, I've become a little bit more aggressive in my bullishness, and I think at this point in time, we are on the precipice of another surge higher. With that being the case, I am a buyer of dips, and quite frankly, don't have a scenario in which I'm willing to sell this pair, but truthfully, I really haven't had that scenario for a while. The interest rate differential will continue to be a major factor in this pair, as the of the idea of tightening monetary policy. Because of this and the fact that the economic numbers in the United States just continue to show strength, after all, the retail sales numbers came out much hotter than anticipated during the Thursday session, it's likely that we will continue to see more upward momentum.
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I, at this point in time, believe that this pair could very well end up going to the 153 yen level, perhaps even higher than that. The Bank of Japan simply cannot raise interest rates much more or even any further than they have because of the massive debt problems that the Japanese economy would face. With that being said the carry trade looks very much in vogue again, and I think it's not only the US dollar that's going to rally against the Japanese yen, but probably most currencies. This makes a lot of sense, as the Japanese yen tends to move in the same way against all other currencies.
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