USD/JPY Forecast 22/10: Bulls Eye ¥159 Breakout (Video)

(MENAFN- Daily Forex) The U.S. dollar continues to see a large amount of interest rate differential against the yen, as we are looking to see whether or not the carry trade comes back into play. This market remains one that I am bullish on.

USD/JPY

The U.S. dollar has gone back and forth during the trading session on Wednesday, as the 200-day EMA continues to offer a little bit of support, while the ¥159 level above offers resistance. Ultimately, this is a pair that is going nowhere, which makes sense considering that rates have essentially gone nowhere over the last couple of weeks. This is a major influence on what is going to be happening next, as rates are the story almost everywhere.

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Ultimately, this is a market that continues to see a lot of short-term buy-the-dip attitude. This market could possibly see a significant turn in attitude if we were to break significantly below the 200-day EMA. In that environment, the ¥156.50 level is a floor. If we can break above the ¥159 level, then I think we take off to the upside. This could be a big mover just waiting to happen.

Interest rates continue to be important

Ultimately, this is an interest rate differential story, and that is part of what is keeping this somewhat supported. This is a market that I think will continue to see a lot of choppiness, but I think support. I do prefer the U.S. dollar over the Japanese yen.

EURUSD Chart by TradingView

Although the Federal Reserve is likely to do nothing this month, the next interest rate decision in December is expected to be a hike coming out of America, while the Bank of Japan sits on its hands. I suspect eventually the buyers take over. I am patiently awaiting some kind of momentum to start adding to this position

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