- In anticipation of the CPI data and to maintain the general upward trend, the US dollar has slightly strengthened against the yen during the trading session.
- In situations like this, you will keep an eye on the overall difference in interest rates.
- This continues to offer a payment at the end of the day, and therefore it makes a lot of sense that longer-term traders continue to hold it overall.
USD/JPY
Early in Tuesday's trading session, the US dollar slightly declined, but it later recovered and began to show signs of strength. I believe that at this point, you have to consider whether or not we can go higher when examining this market. The market has been resilient, but clearly that should continue to be an overall function, not bug in this market.
I believe we have a chance to hit the 50-day EMA at this point if we close above the one-day level of 49.33. We aim for the 149.80 level if we are able to break above it. Since the US dollar clearly benefits from the interest rate differential, I believe that you should continue to buy dips in this market overall.
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But the CPI numbers, which we will have later in the day, will obviously make a huge, huge difference. Having said that, I believe we'll keep an eye on those inflation figures each time the market declines. However, they ought to keep displaying indications that the Federal Reserve might need to postpone its rate-cutting plans.
Additionally, there is a benefit even if rates are lowered until Japan can deliver. Since there is still a significant difference between these two currencies, many traders will stick with it for the long run. Although this pullback has been quite good, we are currently between the 50 and 200 day EMA indicators, which is frequently a busy area for traders.
A significant weakness in the market would emerge at the ¥145 level if we were to close below the 200-day EMA. Anything below that presents a serious problem. And that's when, in my opinion, you have to start asking questions. As of right now, though, this has just been a respectable retreat that, in my opinion, will draw a lot of value seekers and might even signal the start of a recovery.
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