US Dollar Continues Noisy Behavior Against Yen
The US dollar has rallied against the Japanese yen again during the trading session on Wednesday before the FOMC meeting. At this point, it comes down to whether or not we can continue to see upward pressure based upon the longer-term trend, especially as the world will be paying close attention to the Jerome Powell and what he has to say about being hawkish or dovish. At this point, the market has been very much fear driven, and one would have to assume that we will continue to see a lot of that, unless of course the Federal Reserve turned around completely.
USD/JPY Video 27.01.22
That being said, one of the things that has really propelled this pair higher is the fact that the US dollar has been strengthening against most currencies. Keep in mind that the Japanese yen is very much a safety currency, so you do have to be a little bit cautious, but at the end of the day the market also looks at the US dollar as somewhat of a safety currency as well, although in this particular argument it is a bit less safe. Ultimately, this is a market that I think given enough time will eventually go higher if we follow the overall trend, which has been bullish for quite some time.
Keep in mind that the FOMC meeting will probably throw the US dollar around in general, so this is going to be very volatile market over the next 24 hours. All things been equal, I think that the ¥112.50 level underneath should offer support, as it has been important more than once and of course the 200 day EMA is racing towards that level as well. To the upside, the ¥115 level should continue to be important as resistance, as it has been so important for quite some time.
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