- The USD/JPY has rallied a bit during the trading session on Friday to test the ¥145 level.
- The ¥145 level is an area that has been important multiple times, and therefore it looks as if the market is trying to make a bigger move.
- If we can break above the ¥145 level, then we could make a fresh, new high.
- However, remember that the last time the Bank of Japan intervened was just last week, and it was shortly after a break above the ¥145 level.
The ¥145 level is an area that a lot of people will be paying attention to, and therefore I think that eventually we could see the market go above there, but the market breaking out is one thing, but if it is not some type of massive move, the Bank of Japan will probably leave it alone. After all, central banks don’t necessarily could change the trend, but what they can do is slow the market down which is essentially what we have seen.
Looking to Buy the Dip
Underneath, the ¥142.50 level should be supported, just as the ¥140 level should be. The 50-Day EMA sits at the ¥140 level and is rising so therefore I think it offers a significant support level, and it of course offers a bit of a significant uptrend line. Ultimately, the market continues to see a lot of momentum, but in the meantime, I think we are probably trying to burn off some of the excess and try to figure out what central banks are going to do going forward.
Speaking of central banks, the Federal Reserve will continue to tighten monetary policy as they must fight inflation. The Bank of Japan still wants to buy unlimited bonds as they are trying to keep interest rates down, so therefore it’s likely that we would see the Japanese yen should continue to lose value in general. Look at pullbacks as potential buying opportunities, I would not jump into the market willy-nilly, meaning you need to pick your entries. I like the idea of looking at dips as value plays and continue to take advantage of the bigger uptrend that we have seen for quite some time. We should see plenty of opportunities.
Ready to trade our Forex technical analysis? Here are the best Forex brokers to choose from.