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The USD/JPY pair ended last Friday with a strong bullish move, surging from the 152.50 level to close at 154.60. This marked a notable recovery and a continuation of upward momentum for the pair.
Technical Analysis
Short-term support levels are identified at 151.90 and 150.70, which could help sustain the bullish trend. The strong close above 154.00 suggests the potential for further gains in the coming sessions. If bullish momentum continues, the price may test the critical resistance at 154.60.
The daily chart’s moving averages confirm the bullish trend, with the pair consistently trading above key levels, such as the 200 EMA. Additionally, the RSI remains in bullish territory, indicating that buyers are in control.
Fundamental Insights
Several factors are supporting the bullish outlook for USD/JPY:
- US Federal Reserve’s Policy: The Fed’s commitment to maintaining higher interest rates is driving demand for the US Dollar, fueling the USD/JPY rally.
- Bank of Japan’s Dovish Stance: The Bank of Japan (BOJ) maintains its ultra-loose monetary policy with negative interest rates, contrasting with the Fed’s hawkish approach, which supports USD/JPY appreciation.
- Strong US Economic Data: Robust US economic data, such as strong retail sales and job growth, further strengthens the US Dollar, contributing to the bullish trend.
- Global Risk Sentiment: Geopolitical uncertainty and risk-off sentiment are pushing investors toward the safe-haven US Dollar, adding upward pressure to the pair.
Forecast for 16 December 2024
In the short term, USD/JPY is expected to continue its uptrend, with 154.60 acting as a key resistance level. If the price breaks above this level, it could rise further. On the downside, support is seen at 151.90 and 150.70, where buyers may re-enter and maintain the bullish momentum.
Key Levels to Watch
- Resistance: 154.60
- Support: 151.90, 150.70
Conclusion
USD/JPY remains in a strong bullish phase, supported by both technical indicators and fundamental factors. Traders should watch key support and resistance levels closely, along with any significant economic events that could impact price movements.
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