Dollar-yen seems unlikely to break ¥158 immediately
The divergence in monetary policy between the USA and Japan is still likely to remain for at least many months and possibly years. This week’s meeting of the Bank of Japan (‘the BoJ’) probably won’t result in any shift in rates, but attention is on whether the BoJ might reduce its purchases of bonds. For now, there’s no discussion of any further intervention to stabilise the yen, which has now lost more than half of its value against most other hard currencies since 2021.
The 61.8% weekly Fibonacci extension around ¥158 looks like a very strong resistance which will resist testing unless upcoming data or the BoJ’s meeting deliver a genuinely big surprise. The slow stochastic at around 78 is very close to overbought but not yet in the zone of buying saturation. Usually, second and subsequent tests of a certain area tend to be less likely to break through without a fundamental catalyst. That’s why it would traditionally be preferred for a trend-following trader to buy in lower in this situation.
The main dynamic support here is the 50 SMA from Bands slightly below ¥156. That probably doesn’t look too appealing for sellers except in the short term because it’ll be more difficult to find a good ratio of risk to reward for such a trade. The BoJ’s meeting in the early hours GMT of Friday 14 June is the key news coming up, but traders will also monitor American retail sales and Japanese balance of trade on Tuesday 18 June.
This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.
The 61.8% weekly Fibonacci extension around ¥158 looks like a very strong resistance which will resist testing unless upcoming data or the BoJ’s meeting deliver a genuinely big surprise. The slow stochastic at around 78 is very close to overbought but not yet in the zone of buying saturation. Usually, second and subsequent tests of a certain area tend to be less likely to break through without a fundamental catalyst. That’s why it would traditionally be preferred for a trend-following trader to buy in lower in this situation.
The main dynamic support here is the 50 SMA from Bands slightly below ¥156. That probably doesn’t look too appealing for sellers except in the short term because it’ll be more difficult to find a good ratio of risk to reward for such a trade. The BoJ’s meeting in the early hours GMT of Friday 14 June is the key news coming up, but traders will also monitor American retail sales and Japanese balance of trade on Tuesday 18 June.
This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.
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