- The USD/JPY pair continues to exhibit a bullish outlook as it enters the new week.
- During early trading on Monday, the U.S. dollar made modest gains against the Japanese yen.
- This rise is attributed to the Federal Reserve's apparent distance from contemplating rate cuts, contrary to some earlier market expectations.
- The situation was further compounded by a surprisingly robust jobs report released on Friday, further cementing the bullish sentiment.
Given these developments, the question arises as to whether the pair will extend its upward trajectory and potentially revisit recent highs. A plausible initial target would be the 150 yen level, with the possibility of further gains toward 152 yen. Short-term pullbacks in the market are expected to find support around the 50-day Exponential Moving Average (EMA) and the 145 yen level, reinforcing the bullish sentiment.
It is important to note that a significant shift in the overall uptrend is not anticipated unless the pair breaks below the 200-day EMA. Consequently, the prevailing strategy involves capitalizing on short-term market dips, viewing them as opportunities to accumulate the U.S. dollar. The Japanese yen, meanwhile, is poised to face challenges not only from the U.S. dollar but also from other currencies. The Bank of Japan's stance remains far from contemplating monetary policy tightening, which further supports the notion of a weaker yen.
Bullish Flag Pattern?
The formation of a potential bullish flag pattern adds to the positive outlook. If the measured move of this pattern materializes, it could propel the pair not only to recent highs at approximately 152 yen but potentially even higher. Although the immediate realization of this scenario may not be imminent, it underscores the potential for further upward movement.
At the end of the day, the USD/JPY pair enters the week with a bullish bias, reflecting the Federal Reserve's reluctance to consider rate cuts and the robust jobs report. The upcoming targets are set at 150 yen and 152 yen, with short-term pullbacks anticipated to find support around the 50-day EMA and 145 yen. The broader uptrend remains intact unless the pair breaches the 200-day EMA. These factors collectively suggest that buyers are likely to maintain control over this currency pair in the near term.
Ready to trade our daily Forex analysis? We’ve made this forex brokers list for you to check out.