USD/JPY Maintains Calm So Far Today

The pair was little changed on the day, sitting around 148.85 at the moment. For a pair that has recently been caught in the midst of high volatility, today’s slight movement reflects a calmer tone as we look to European trading.

While they can deny it, signs of price action since Friday suggest that Japan has intervened at least twice in an attempt to push the market back. Monday’s move was notable as we saw the pair drop from 149.60 to 145.48 but that was quickly redeemed. There was another late afternoon drop here, but it was much shallower and just as quickly redeemed.

This continues to underline the prevailing sentiment in the pair and here is how the short-term chart is shaping up:

To be honest, I wouldn’t focus too much on certain aspects involving the techniques at this time, as it’s more about the psychology and trading sentiment of the pair. The Japanese authorities are looking to intervene as we edge closer to 150.00 while the bulls aren’t showing much fear buying any intervention dips.

As such, it will now depend on Japan’s appetite if it really wants to stay stuck against the market. The problem here is that with each attempt of roughly similar size, the interventions will slowly lose more effectiveness. As such, they can only draw a hard line so long before the tide takes over.

All eyes will be on the BOJ policy meeting this week and if there is no change in the status quo it will put Japan in a really, really tough spot to try and keep fighting this battle. .


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