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Will the price of USDJPY continue higher? Price is trading above key resistance but buying momentum seems to have faded.
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USDJPY Trading Above 137.75 Resistance – The Dance Between Politics and Seasonality
In a notable shift, the USDJPY currency pair is now trading above the 137.75 resistance level. This rise in the price of USDJPY is primarily due to the underlying economic and geopolitical factors that are currently influencing the financial markets. One such significant development, currently steering the market’s direction, is the ongoing US debt ceiling negotiations, with the deadline for reaching an agreement looming on June 1st.
Market players are keenly watching the ongoing discussions in the US around the debt ceiling. The nation’s debt ceiling is a critical element in the balance of global markets and, therefore, can have a profound impact on currency pairs like USDJPY. The fluctuations in the USDJPY are an indicator of the nervous anticipation around the US debt ceiling negotiations, reflecting the uncertainty that lies ahead.
If the US lawmakers fail to reach an agreement on the debt ceiling by the fast-approaching June 1st deadline, it could potentially lead to a technical default. The impact of this default could trigger widespread risk aversion, thus affecting the USDJPY pair.
Meanwhile, the Japanese Yen’s strength, as indicated by seasonal patterns, seems to persist. Seasonal trends show that the JPY typically demonstrates strength during the month of June approximately 80% of the time. This pattern could potentially counterbalance the upward momentum of the USDJPY, especially if the price continues to trade higher.
Seasonal trends are an interesting element in the world of Forex. While not a guarantee, these trends often reflect a recurring pattern of behavior that many investors consider when making trading decisions. In this case, the impending strength of the Japanese Yen during June could be playing on the minds of investors who are trading the USDJPY pair. It’s a critical piece of information, likely to influence their trading strategies and decisions.
Despite the current strength of the USDJPY pair, this seasonal trend could induce a cautious approach from investors. As the price of USDJPY hovers above the resistance level, investors could be weighing the potential for a pullback, particularly considering the historical strength of the JPY in June.
USDJPY Analysis
The price on the chart has traded through multiple technical levels and some observations included:
- The price is trading above 137.75.
- If price breaks higher it could head towards the 142.00 highs.
- If price trades lower and back below the 137.75 it could offer selling opportunities to traders.
Have you watched our interview with EURUSD analysis? You can see it here.
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