Dollar yen fundamental overview
The decision of the Bank of Japan (BoJ), expected tomorrow, could introduce further dynamics into the dollar and yen. Despite expectations of unchanged rates, market participants will be very alert to any comments on the potential reduction in monthly bond purchases. Such moves could significantly affect the yen’s relative strength against the dollar.
The FedWatch tool currently reflects a reduction in the probability of a Federal Reserve rate cut in September by at least 25 basis points (0.25%), showing a significant decrease compared to the previous week’s forecast. Ninja investors remain on the lookout for further economic data from the United States, including the weekly index of jobless claims and producer prices, which may offer new insights into the country’s economic conditions.
Technical Analysis and Dollar Yen Forecasts
At the time of writing, the price of the ninja was trading at 157.30, up 0.33% and in full bullish inclination after the failed attempt to close below the annual level of 155.89, consequently leading to a LONG rebound. Reinforcing the bullish momentum, the RSI oscillator is above the 50 level. A weekly close above 157.30 would allow the bulls to attempt an extension in order to reach the area of yearly highs around the yearly level 159.15.
On the downside, only a close below the annual level of 155.89 could intensify the downward pressure on the dollar and yen, where the exchange rate could potentially reach first the key level of 154.00 and then the annual level of 151.90.
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