USD/JPY Price Forecast: Dollar remains capped below 162.40 resistance area
The US Dollar (USD) appreciates against the Japanese Yen (JPY) for the fourth consecutive day on Wednesday, fuelled by the resumption of hostilities in the Middle East and dovish comments from Bank of Japan (BoJ) officials. The Greenback, however, is struggling to break last week’s highs at 162.40 so far.
A new round of US strikes on Iran, in retaliation for alleged attacks from Tehran on vessels closing Hormuz earlier this week, hurt risk appetite on Wednesday. and provided some support to the safe-haven US Dollar,
The Yen, however, is suffering from weakness of its own, as BoJ monetary committee member Toichiro Asada, the dovish dissenter at June’s monetary policy meeting, said that he needs to see signs of demand-driven inflation before supporting interest rate hikes,
Technical Analysis: 162.40 is the last barrier before 40-year highs
USD/JPY trades at 162.26, maintaining its positive structure intact although bulls have been rejected at Monday's high in the area around 162.40. Four-hour charts show the Relative Strength Index (14) easing toward neutral from prior overbought readings, while the Moving Average Convergence Divergence (MACD) remains slightly positive, hinting that upside momentum is still constructive.
On the topside, horizontal resistance at 162.41 (June 6 high) is closing the path towards the 40-year high at 162.85, followed by 162.84. On the downside, initial support appears at Tuesday's low, near 161.70, ahead of the key support area of 160.50, which held bears last week.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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