USD/JPY Forecast 29/07: Can Bulls Push Toward ¥151? (Chart)

(MENAFN- Daily Forex)

• The US dollar has spent the majority of the trading session on Monday rallying against most currencies, including the Japanese yen.
• We have broken above the crucial ¥148 level, and perhaps more importantly, the 200 Day EMA.
• By doing so, this will certainly capture a lot of attention from both a headline standpoint, and of course a psychological standpoint.

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The biggest problem with trading this market right now is that we have both the FOMC interest rate decision coming out, and the Bank of Japan interest rate decision. Because of this, I would anticipate a lot of volatility, and you will have to keep your position size reasonable. Ultimately, this is a market that I think does try to go higher and if we can get a daily close above the ¥149 level, I think that will kick off the next leg higher.

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There are people out there saying that perhaps the Bank of Japan will start talking about raising rates again, but quite frankly I don't think they can over the longer term due to the lack of bids that have been seen from time to time in the Japanese Government Bond markets. The FOMC, or the Federal Open Market Committee, is not expected to cut interest rates, and people will pay close attention to what the Federal Reserve has to say during the press conference, for any hint that they will in fact cut rates.

EURUSD Chart by TradingView

If they do, that could help the Japanese yen, but the biggest problem right now is that the economy in the United States is doing quite well, and therefore it's difficult for the Federal Reserve to get a massive with its interest rate cuts, so I do think that we may continue to see the US dollar rally against most currencies, including the Japanese yen. If we do in fact break out above the most recent swing high, I think the ¥151 level will be the next target, followed by a much longer-term“buy-and-hold” potential situation.

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