Early on Wednesday, the US dollar made a small rally through its weekly cycle, especially against the yen. Now, it appears to be attempting to move higher again. According to the Positive Technical Analysis, the market forecast remains optimistic.
There is a visible ascending triangle on the latest chart. Obviously, it is something we should pay special attention to as it is a strong indicator that the market may continue to rise.
The US dollar has been rallying against the Japanese yen as of late. Wednesday’s trading session showed continued momentum toward the ¥135 level. This comes as no surprise, given the current situation. The Bank of Japan continues to print currency in an effort to keep its monetary policy afloat. As long as this practice continues, there is little reason to believe that the yen will strengthen in the long term.
Technical analysis also indicates a bullish trend, with an ascending triangle pattern emerging on the USD/JPY chart. If this pattern continues, it could lead to a significant increase in the currency pair’s value, potentially reaching as high as ¥148 over the longer term. Despite recent speculation that the Federal Reserve may be finished raising rates, they are still a long way from loosening monetary policy, which will likely continue to buoy the US dollar.
The hourly chart of USD/JPY on FXOpen depicts the pair initiating a new upsurge from the support zone of 133.50. Subsequently, it gradually advanced above the resistance zone of 134.65. The pair is now consolidating above the 50-hour simple moving average. It exposed immediate resistance on the upside near the 135.35 level. If the pair can break above this level, it may begin a decent increase, with the first major resistance sitting near the 135.65 level.
The next major resistance is near the 137.30 zone. Besides, a clear break above this resistance could push the price further higher towards 138.00. However, there is always a risk of a fresh decline. A potential downtrend of the ratio is likely as it approaches the 50-hour simple moving average and a bullish trend line support at 135.00.
Despite the potential risks and uncertainties, the current technical analysis indicates a positive outlook for the USD/JPY currency pair. A bullish trend is emerging on the charts. As traders continue to monitor the situation, it is visually clear whether this upward trend will continue. On the other hand, there is a slight possibility for the pair to experience a reversal in the upcoming season.
Later in the day, the CPI figure will become public. It will undoubtedly have a significant impact on how the US dollar performs. All else being equal, this is a market that has had a nice retreat to the 50% Fibonacci level. Moreover, it is currently attempting to continue its upward trend, following the significant move last year.
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