USD/JPY analysis
- Japan’s Finance Minister Suzuki aims to be “fully prepared” for currency trends
- USD/JPY continues to enter the danger zone, approaching 155.00
- please get it JPY Today’s Q2 outlook provides exclusive insight into the key market catalysts that every trader should be watching:
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Japan’s Finance Minister Suzuki aims to be ‘fully prepared’ regarding currency fluctuations
A simple equal-weighted index measuring the performance of the Japanese yen revealed a significant depreciation of the Japanese yen against a basket of major currencies. The yen got off to a bad start this week, prompting a response from Japan’s Finance Minister Suzuki. Regarding exchange rate trends, Mr. Suzuki said, “We want to be fully prepared,” and is keeping a close eye on exchange rate movements.
Previously, former Japanese currency official Watanabe said the authorities are likely to consider currency intervention at the USD/JPY 155.00 level. Officials have said many times that they are not targeting a specific level, but are watching for undesirable volatile movements (low prices).
Japanese Yen Index (equal weighting) pound/yenUSD/JPY, euro/yen and Australian dollar/yen))
Source: TradingView, Author richard snow
USD/JPY continues to enter the danger zone and approaches the important 155.00 level
USD/JPY accelerated towards the 155.00 level at the beginning of the week as the dollar remains at high levels. 152.00 was initially a line that the market did not dare cross, but dollar strength pushed the line until the market felt comfortable above 152.00.
Traders appear encouraged by the lack of urgency in communication from Tokyo and continue to bid the pair higher. The RSI reveals that the pair is trading well within overbought territory and is showing little to no signs of easing.
Considering that the warning about 155.00 issued by former currency official Mr. Watanabe may be a clue to a serious response (foreign exchange intervention), long trades from here have an unfavorable risk-reward ratio. . 155.00 appears as stiff resistance, while 152.00 and 150 represent levels that could be triggered immediately if Japan feels the need to take action. After that, 146.50 comes into view.
USD/JPY daily chart
Source: TradingView, Author richard snow
change |
long |
shorts |
OI |
every day | 17% | 0% | 3% |
weekly | 6% | -11% | -9% |
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnow
Daily FX We provide technical analysis on foreign exchange news and trends affecting global currency markets.