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MENAFN- Daily Forex)
The US dollar rallied against the Japanese yen on Thursday, but it should be known that the Bank of Japan meeting will keep things quiet until the statement and press conference on Friday.
The US dollar rallied against the Japanese yen on Thursday as we continue to see a lot of back-and-forth trading, but focus on the interest rate differential. We did give back some of the gains, and that makes a certain amount of sense as well, due to the fact that Friday is possibly going to be a volatile session as the Bank of Japan continues to see a lot of questions asked about its interest rate policy.
It will, in fact, give its latest update on its interest rate policy. The change is expected to be nothing, but the statement will be where people pay the most attention to. If they sound particularly dovish, that could send the US dollar much higher against the Japanese yen, and I think we would tag the 160 yen level.
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A pullback at this point in time probably sees support near the 156.20 level, where the 50-day EMA is hanging around. I do expect a lot of volatility, and I do think dips will offer buying opportunities unless, of course, the Bank of Japan does something completely unexpected like hike aggressively.
I don't think that's going to be the case; quite frankly, they have too much debt to do that. Expect volatility, a lot of noisy behavior, and at this point, be cautious about selling into negativity.
I think that negativity, if you are patient enough, will offer a nice opportunity to continue to add to a position that, quite frankly, has paid you quite well since the middle of April. Of course, you get paid at the end of every day, right along with that.
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