USD/JPY Price Forecast – Us Dollar Continues to Grind Higher
The US dollar has rallied a bit during the course of the trading session on Tuesday to show signs of strength yet again, but we also continue to see a bit of noise right around the ¥114 level, an area that has been noisy more than once, so it is not surprising to see that we are struggling a bit. All things being equal, this is a market that also tends to move on risk appetite, as the Japanese yen is considered to be a major “safety currency.”
USD/JPY Video 08.12.21
Furthermore, you need to pay attention to the interest rates coming out the United States, as a rising interest rate in the United States will make the US dollar much more attractive than the Japanese yen, and therefore it is likely that we are trying to see whether or not the differential between the 10 year note continues to separate. To the downside, the market will see quite a bit of support near the ¥112.50 level, as has been shown a couple of times over the last month or so.
To the upside, the ¥115 level is significant resistance, something that can be seen on longer-term monthly charts as well. In other words, the market is likely to see a lot of trouble near the ¥115 level. I think at this point in time, we may return to that level, but it is difficult to imagine a scenario that we simply slice through it. If we did, then this pair would become a major “buy-and-hold” type of situation going forward. As things stand right now, I think we just continue to consolidate in this general vicinity.
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