Pay attention to the "Dollar Index"!! Can the USD/JPY range upper limit break beyond 114 yen?!

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USD/JPY has reached the upper end of the range that has continued since last year.

From here, will it break out of the range and rise?

Or will it turn down at the upper end of the range?

It has arrived at a notable line.

USD/JPY Weekly Chart

The recent environment surrounding the dollar and yen, with the midterm elections over and uncertainty fading, may begin to show a clearer direction.

Since Japan continues its accommodative policy, unless external factors (risk-off) appear, this currency may be prone to selling. The concerns are stealth tapering and whether the amount of easing has decreased.

Regarding the U.S. dollar, there are mixed factors for both selling and buying.

Are selling factors stronger?

Are buying factors stronger?

In times like these, one thing I’m paying particular attention to is “Dollar Index”.

The index that measures the value of the U.S. dollar,calculated bythe FRB and the New York Mercantile Exchange, etc.,is

When the value of the yen is not changing much, the “Dollar Index” and the USD/JPY correlationbecome strong.

USD/JPY Daily Chart

Dollar Index Daily Chart

Dollar Index Weekly Chart

Not always correlated, but I view it as one of the important factors.

This time, whether USD/JPY can rise beyond the 114 yen level depends on whether it can surpass theDollar Index milestone!

Another use of the “Dollar Index” is as a gauge for dollar strength. President Trump is unpredictable, but…

When the dollar is relatively strong=Dollar Index is rising.

Therefore, when the Dollar Index rises, you might hear cautionary remarks against a stronger dollar.

It’s interesting to watch because senior presidents, central bank officials, and finance ministers tend to speak up at certain levels.

This time, one of the materials I’m watching is the introduction of the “Dollar Index.”