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MENAFN- Daily Forex) Potential signal
ANY drop towards the 158 level, I am willing to buy w/ a stop at the 157 level. I would aim for 160.
The US dollar rallied against the Japanese yen again on Friday as interest rate differentials continue to favor the US dollar. I like this pair in general and I do think that regardless of what the Bank of Japan thinks it's going to do, the reality is that rates in America continue to skyrocket and as long as that's the case, the US dollar will continue to be a currency that people want to own.
The 158-yen level is an area that was resistance and it should now offer support. I like buying dips towards that area. The 50-day EMA also sits there, so it's something that people will be watching very closely. To the upside, the 160-yen level would be your target and it's also an area where the Bank of Japan recently intervened.
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I think anything above could open up the possibility of a huge move to the upside, well beyond the 1990s swing high. Short-term pullbacks again I think are buying opportunities, but really at this point in time, we have to look at this through the prism of finding opportunities to buy dollars over the longer term because eventually when this thing breaks out, it could be a multi-year move
To the downside, I see massive support at the 156-yen level followed by the 200-day EMA. I have no interest in shorting this pair. I'm not paying the swap and of course, everybody is picking on the Japanese yen at the same time, which does make a certain amount of sense considering that the Bank of Japan has no real outlet to start raising rates and even if they did, it wouldn't matter because rates everywhere are going higher.
With this, I think we have to look at this as a situation that will continue to play out over the next several months and continue to offer plenty of opportunities if you are patient.
EURUSD Chart by TradingView
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