(MENAFN- Daily Forex) On Monday, the US dollar edged higher during the trading session, with the moving averages providing support. However, the market is currently battling at the 135 yen level and is looking to break through and move higher. advertisement The yen is a popular asset in turbulent times. Trade USD/JPY now! The USD/JPY pair is strongly affected by the interest rate differential between Japan and the United States. The Federal Reserve is very hawkish and the Bank of Japan is doing everything it can to combat rising interest rates with its yield curve control policy. The Bank of Japan caps the interest rate on his 10-year government bonds at 50 basis points, and buys its own bonds whenever the bond market sells out to keep interest rates low. As a result, the Bank of Japan has to flood the market with more Japanese Yen. In contrast, the US has pursued a tighter monetary policy, which could continue for some time. As a result, the market will continue to experience greater upward pressure than anything else. However, this is not always easy as the US dollar is struggling.
Despite this, the USD/JPY chart shows that the Japanese yen continues to fall against the US dollar.
The market is currently in an upward triangle and is expected to eventually top 138 yen. However, the market remains turbulent in the short term and could lead to a “buy when it falls” situation.
Therefore, it is advisable to carefully wait for the market to fall before gradually building larger positions.
Market volatility can be stressful for traders. Especially if you are using too much leverage right off the bat. So patience is required when building a position in this market. Waiting for a drop and building an upside position is a good strategy to avoid losses. Ultimately, the USD/JPY pair is currently in a tight monetary policy situation as the US pursues tighter monetary policy while the Bank of Japan continues to battle rising interest rates with its yield curve control policy. The Japanese yen may continue to fall against the US dollar, but caution should be exercised when building positions in this market. Waiting for a dip to build a position is a smart strategy to avoid losses due to market volatility. Ready to trade your daily forex analysis? We’ve made a list of the best online forex trading platforms worth trading on.
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