The USD/JPY exchange rate continued its ascent on Wednesday, climbing to its highest level since mid-January. The pair's robust upward trajectory is fueled by a widening interest rate differential between the US and Japan, as the Bank of Japan maintains its ultra-dovish stance. This dynamic keeps the yen under significant selling pressure, with traders continuing to favor the US dollar.
Despite the strong bullish momentum, technical indicators are beginning to flash a warning. The Relative Strength Index (RSI) has moved into overbought territory, suggesting the current rally may be due for a near-term consolidation or pullback. This often signals that the asset has become overextended in the short term, prompting some profit-taking.
However, the fundamental backdrop remains firmly in the dollar's favor. The underlying upside bias is considered intact as long as the Fed's hawkish rhetoric contrasts with the BOJ's yield curve control policy. Traders are now watching key resistance levels, with any retreat likely viewed as a potential buying opportunity rather than a trend reversal.
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Data Source: GrowingPool Analysis Team Updated: 2025-11-19 16:54
Disclaimer: This article is for reference only and does not constitute investment advice. Forex trading involves risks; please make decisions carefully.