- The US dollar had initially tried to rally during the trading session on Monday but gave back gains against the Japanese yen as we continue to see a lot of back and forth sideways action.
- We are hanging around the 200 day EMA and the 50 day EMA, both of which are flat, and it suggests that the market just isn't quite ready to get moving yet.
That makes a certain amount of sense considering that the Federal Reserve is likely to cut rates, but we already know that. And therefore, it's a situation where traders are looking to see what's the attitude of the Federal Reserve going forward. The market will be paying close attention to where the Fed is going. And at the same time, the Bank of Japan looks ready to keep interest rates as low as possible as well. So, we'll see.
Wait, and See?
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Right now, I think it's somewhat of a wait and see type of scenario, but you get paid to hang on to this pair at the end of every day. And I think that's part of what keeps it somewhat afloat. Whether or not we see a bottoming pattern here probably gets sorted out in the next couple of weeks. But I've been saying for a while, the dollar just isn't ready to roll over and die against the Japanese yen.
If we do break to the upside, perhaps clearing the 148.50 level on a daily close, then it opens up a move to the 150.50 yen level. Short-term pullback should continue to see plenty of support, probably closer to the 146.50 yen level. At this point, it's more or less a short-term back and forth type of scenario. And therefore, I'll be looking to short-term charts to place some trades, but I have a core position I've just basically been hanging on to collecting swap.
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