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MENAFN- Daily Forex)
USD/JPY remains firmly bullish, supported by the 50-day EMA and interest rate differentials favoring the United States. Volatility may arise around the Bank of Japan decision, but dips continue to look like buying opportunities.
The US dollar has risen quite nicely against the Japanese yen during trading here on Wednesday as we continue to see the area just below the 155 yen level offer a bit of a floor. Furthermore, the 50-day EMA sits underneath there as well, offering support. So, really, at this point in time, I think you have a buy on the dip situation. If the market can rally from here, the 157 yen level is an area that I'll be watching, but let's also keep in the back of our mind that we have the Bank of Japan interest rate decision on Friday.
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Now, while I fully anticipate that the interest rate differential will continue to favor the United States, the reality is that there could be a little bit of volatility around that interest rate decision. So be aware of that. I don't necessarily think that is a good or bad thing. I think it's just a thing. So, with this, I remain fairly confident in the overall trend of this market. I think it is probably only a matter of time before it goes higher.
Watching the 50-Day EMA for Trend ContinuationEURUSD Chart by TradingView
But the question now is, will the 50-day EMA hold? We will probably know midday on Friday whether or not the market has the momentum to continue racing towards 158 yen or if we need to pull back a little further in order to start buying. I have no interest in shorting this pair. Quite frankly, there's really nothing on this chart that even remotely suggests that you should be doing it. Although you can make an argument, maybe we can consolidate between 154 and 158 over the next several weeks, especially as we go into the holiday season. But beyond that, I don't really see anything negative here.
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