US Dollar vs Japanese Yen Technical Analysis

U.S. dollar continues to consolidate during the Friday session against the Japanese yen as we are looking for the next directional move. We had recently broken through an uptrend line, but we’re just hanging out here. So, the question is, will it end up being a throw over? The Jackson Hole Symposium is going on right now.

And as you can see, the market is likely to continue to listen to a lot of rhetoric and speeches from central bankers around the world. And with that being said, the market breaking above the 150 yen level opens up the possibility of a much higher run. Keep in mind, this is all based on the idea that the Bank of Japan will continue to tighten monetary policy. But quite frankly, I don’t think they can go very far, at least not without wrecking their own economy.

So, this question really probably goes back to the Fed before it’s all said and done. If he’s slightly hawkish in this speech or maybe not dovish enough, that will send this pair higher. On the other hand, if it looks like we’re going to see the US dollar selling in general, breaking down below the 143.50 Yen level opens up fresh selling and we could drop quite drastically. This is a pair that’s all about the carry trade, so the interest rate differential will continue to make a massive difference in what happens here. As in saying right now, I think we’re in a bit of a holding pattern trying to figure out where the next move is.

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