The USD/JPY has rallied against the Japanese yen during Monday's trading session, with the Japanese yen continuing to weaken. The Bank of Japan's efforts to work against rising yields by purchasing bonds has led to the printing of more currency, resulting in a loss of strength in the Japanese yen.
The bullish Friday candlestick is a positive sign for traders, indicating a willingness to get involved in the trade. If the market can break above the ¥138 level, the US dollar could potentially go much higher. While it may not be easy to break to the upside and continue going higher, the formation of a higher low since the bottom suggests that an upward trend may eventually occur.
From a structural standpoint, it appears that the market is trying to pick up momentum, with the ascending triangle formation potentially kicking off. The "measured move" could potentially push the pair as high as ¥147, although it may take some time to achieve this level.
The Rally is Expected to Continue
- However, the Federal Reserve's interest rate decision this week is expected to have a significant impact on the US dollar, contributing to the market's volatility.
- Additionally, the US jobs report on Friday is expected to move the pair quite drastically.
- This is typically the case, but it should be noted that these next few weeks are going to be crucial to the overall direction of this pair.
Despite the current market volatility, it's worth noting that if the Bank of Japan continues to stick to its guns regarding the yield curve control policy, the market should continue to move higher. This trend provides a positive outlook for traders looking to enter the market.
TLDR; the US dollar's rally against the Japanese yen is expected to continue amidst the current market volatility. Traders should pay special attention to the Federal Reserve's interest rate decision this week and the US jobs report on Friday, as these events are expected to have significant impacts on the market. While it may not be easy to break to the upside and continue going higher, the formation of a higher low since the bottom suggests that an upward trend may eventually occur. If the Bank of Japan continues to stick to its guns regarding the yield curve control policy, the market should continue to move higher, providing opportunities for traders to profit from the market.
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