(MENAFN- Daily Forex)

• The US dollar dropped a bit against the Japanese yen, losing about one third of a percent by the time Americans went home from work.
• Ultimately, this is a market that is likely to continue to see a lot of noise in this general vicinity, as we are stuck between 2 major moving averages in the form of the 50 Day EMA and the 200 Day EMA.
• Furthermore, the ¥148 level has been a massive barrier, so it's really not until we can clear that easily that momentum comes back into the market to the upside.

On the downside, if we were to break down below the 50 Day EMA, we could see the US dollar trade down to the ¥146 level, possibly down to the ¥145 level. Ultimately, this is a market that I think is probably one that I do want to remain bullish of, despite the fact that the Federal Reserve might have to cut rates. After all, the interest rate differential between the United States and Japan is wide enough to drive a truck through, meaning that you get paid at the end of every day, even if we were to see one or two interest-rate cuts between now and the end of the year by the Federal Reserve.

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The Bank of Japan has been rumored to be worried about inflation for the first time in decades, but I have seen this story multiple times. The reality is that they have massive problems in their bond market right now and will more likely than not have to start to buy the Japanese Government Bonds, which is essentially the same thing as quantitative easing. The Japanese yen may or may not have peaked a couple of months ago, but it certainly looks as if it is a currency that most people don't want to own. In this particular pair things are a little murkier, mainly due to the Federal Reserve Outlook but you can see that the JPY has lost ground against multiple other currencies. Eventually, I think that shows appear as well although it could be a much more stable and more of a grind to the upside.

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