USD/JPY Forecast: Dollar Strength to Persist on Hawkish Fed Testimony

USD/JPY Daily Chart

USD/JPY is likely to stay bid as long as the RSI holds above 70, with the pair at risk of making a run at the 2018-high (113.39) as it extends the bullish sequence from earlier this week, but need a closing price above the 112.40 (61.8% retracement) to 112.80 (38.2% expansion) region to open up the next region of interest coming in around 113.80 (23.6% expansion) to 114.30 (23.6% retracement).

Nevertheless, a string of failed attempts to close above the 112.40 (61.8% retracement) to 112.80 (38.2% expansion) hurdle may generate a pullback in dollar-yen, with the first downside area of interest coming in around 111.10 (61.8% expansion) to 111.60 (38.2% retracement). At the same time, the RSI may also warrant attention should it fall back below 70 and flash a textbook sell-signal.

For more in-depth analysis, check out the Q3 Forecast for Japanese Yen

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— Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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