USD/JPY Forecast 15/10: Can Bulls Break Above ¥159?

(MENAFN- Daily Forex) The US dollar continues to see a lot of pressure to the upside against the yen, as interest rates in America keep climbing.

USD/JPY

The U.S. dollar initially pulled back against the Japanese yen during trading on Wednesday to test the 50-day EMA yet again. However, we've seen the dollar take off to the upside to go looking to test the ¥159 level when the CPI numbers came out in the United States hotter than anticipated.

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We do get PPI tomorrow, so that could also add to the pressure. But when you look at the behavior of the market over the last couple of months, we've seen a significant shot higher, a pullback, and now we're forming a bit of an ascending triangle.

This suggests to me that there is still an underlying pressure to the upside here in this pair

The interest rate differential continues to pay you at the end of every day, so it's not necessarily the worst place to be. That being said, keep in mind that the Bank of Japan has intervened a few times, and they will pay some lip service to that, but the reality is they're very limited in their ability to move the markets over the longer term.

Furthermore, odds are now that they will not be raising rates in October, and that gives the U.S. dollar a little bit more leeway to run amok against the Japanese yen. With yields rising in America, it's not a huge surprise to see that the U.S. dollar is rising here, but the ¥159 level is clearly an area that is causing resistance, I think all the way to at least the ¥160 level.

EURUSD Chart by TradingView

So, the next 100 pips or so could be difficult, but remember, you get paid to hang on to this, so a little bit of patience could possibly go a long way with an appropriately sized position.

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