The USD/JPY pair jumped yesterday after the hawkish statement from the Fed. The pair jumped to an intraday high of 112.14. This move was expected after the Fed reiterated its earlier-announced plan to hike rates two more times this year. This came just two days after the Bank of Japan restated the need to maintain negative interest rates and continue with the large stimulus package.
The current stand by the Bank of Japan has continued to create demand for the low-yielding Japanese Yen. This is because traders usually buy the low-yielding yen and buy the high-yielding dollar. This is a technique known as carry trade. More demand for the yen leads its price to fall because the supply remains the same. The BOJ goal is to weaken the yen because a weak yen means more exports for the country. The question is on how long the bank will continue weakening its currency.
Today, the USD/JPY pair has fallen slightly to 111.62. This level is above the 42-simple moving average and below the 21-day moving average. It is also slightly above the middle band of the Bollinger Bands with the RSI trading at the neutral level of 50. This means that after the slight decline, the pair could continue strengthening as traders buy on the dip.
The post USD/JPY Technical Analysis: Expect Upward Momentum to Resume After the Slight Dip appeared first on Forex.Info.
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