USD/JPY Rises to a Nearly 5-Month High
According to the USD/JPY chart today, the US dollar has climbed to 157 yen. This movement was driven by monetary policies of both countries' central banks.
The Federal Reserve took a hawkish stance, with Chair Jerome Powell suggesting the possibility of fewer rate cuts in 2025 than earlier expected.
On the other side, the Bank of Japan's Governor Kazuo Ueda, as reported by Reuters, made "surprisingly dovish" remarks. He delivered a cautious outlook on monetary policy following the central banks decision to maintain its interest rates unchanged.
He emphasised that:
Real interest rates remain very low.
New risks are emerging due to trade policies proposed by US President-elect Donald Trump.
Technical analysis of the 4-hour USD/JPY chart shows that:
The pair moves in an upward trend, but based on pivot points (marked in red), the slope of the ascending channel might shift.
The RSI is at a multi-month high, and the black trendlines highlight significant demand strength in the market throughout December.
We can suggest that the US dollar is significantly overbought relative to the yen. Could a pullback, such as to the lower black trendline, be expected? Given the importance of fundamental factors such as central bank decisions, any potential pullback might not threaten the continuation of the current uptrend through the end of the year.
Read more: https://fxopen.com/blog/en/oa-usd-jpy-rises-to-a-nearly-5-month-high/
Text source: Forex Trading Blog
