USD/JPY Forecast 22/12: Yen Selling Intensifies (Chart)

(MENAFN- Daily Forex)

• The U.S. dollar continues to surge against the Japanese yen despite a Bank of Japan rate hike, as markets dismiss policy tightening, yen selling accelerates, and momentum remains firmly bullish with buyers pressing higher levels.
• The US dollar has skyrocketed against the Japanese yen despite the fact that the Bank of Japan raised interest rates by 25 basis points.
• This was an expected move, but the bond market in Japan really took off to the upside as yields jumped due to the Japanese suggesting that maybe they would tighten further.
• This tells you that the market doesn't appreciate what the Japanese are doing, and they are getting rid of their yen as a vote of no confidence.

There is an argument that there is an intervention zone near the 158 yen level, and that might be true, but typically speaking, that is a short-lived phenomenon. And I do think that the market is starting to call the bluff of the Bank of Japan.

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Despite the fact that they raised rates, you still get paid at the end of every day to hold this pair. And the US dollar has been strengthening against most things. It's not just the Japanese yen early in the session. The 155 yen level is a support level. The 158 yen level is a resistance area. We are hanging around in a 300-point range, but this candlestick on Friday is no joke.

EURUSD Chart by TradingViewMomentum Signals Buyers Are in Control

And it does suggest that perhaps we have further upside to go. I think momentum in and of itself is an obvious thing, and I have no interest whatsoever in shorting this pair. If the market were to break down below the 155 yen level and perhaps the 50-day EMA, then we could fall to the 153 yen level, but the size of the candlestick tells me that the buyers are here to stay. This is a big move right in the face of the Bank of Japan.

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