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MENAFN- Daily Forex)
The US dollar has drifted a little bit lower during the trading session on Wednesday as we continue to see a lot of noisy behavior. It's worth noting that the 200 Day EMA has offered resistance, and now it looks like we are going to continue to see this area as being important. The pullback in the USD/JPY pair goes right along with the last couple of weeks, as the Bank of Japan is more worried about inflation than they had been previously.
Technical Analysis
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I believe that the technical analysis for this market is likely to continue to show signs of hesitation for momentum to the upside, but I don't necessarily think it's ready to break down significantly from here. The ¥150 level underneath is a major support level, and as long as we can stay above there, then I think you have a reasonable chance for the US dollar to pick up momentum, as the interest rate differential between the 2 currencies is fairly wide. Even if the Bank of Japan were to raise rates by 25 basis points, the reality is that you still get paid to hang on to this pair, and it is probably only a matter of time before the market starts focusing on that again.
Nonetheless, this is a market that hasn't shown itself to be reliably bullish yet, and I need we need to get the market to close above the ¥152.50 level, and therefore if we take off above there, then the market could go looking to the 50 Day EMA, and then perhaps the ¥155 level after that. Anything above there would have the Japanese yen being eviscerated by the US dollar.
EURUSD Chart by TradingView
Ultimately, this is a market that I think continues to be very noisy, and choppy to say the least. However, I will keep an eye on that ¥150 level, as it is a large, round, psychologically significant figure, and an area that's been both support and resistance, so therefore I think you've got a situation where noise and back and forth continues to be the case.
Want to trade our USD/JPY forex analysis and predictions ? Here's a list of forex brokers in Japan to check out.
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