Fundamental Analysis

• USDJPY briefly reached a high of 160.22JPY, then plummeted to the 154JPY range
• Minister of Finance Kanda did not comment on the possibility of intervention
• Despite ongoing US-Japan interest rate differences, a retest of the 160JPY level may occur

USDJPY technical analysis

Analysis of USDJPY’s daily candlestick chart indicates volatility, with a spike to the low 160JPYs from 158JPY in the morning, followed by a 600 pips drop to 154.5JPY due to strong JPY buying in the afternoon. This pattern strongly suggests the possibility of an intervention. A high-price bearish candlestick formation occurred, and although prices have returned within the rising channel, a shift to a stronger JPY seems unlikely.

Market recognition of intervention might encourage speculators to target a weaker JPY. Future focus will be on whether it breaks below 155.50JPY towards a stronger JPY. However, significant fluctuations may lead to less predictable market movements.

Day trading strategy (1 hour)

USDJPY analysis on the 1-hour chart shows a rise to 160.20JPY followed by a sharp drop to 154.48JPY. Despite approaching the 200 moving average, a shift to a stronger JPY trend is unlikely.

Fundamentally, the existing interest rate difference between the US and Japan suggests a buying strategy on dips. The key focus will be on whether it falls below 150.50JPY.

An ideal day trading strategy would be to enter a buy at 155.75JPY, set a stop loss at 155.40JPY, and target a take-profit at 157JPY.

However, potential foreign exchange interventions and unpredictable market changes require flexibility.

Support/Resistance lines

Future considerations for support and resistance lines include:

Recent High: 160.22JPY

Market Sentiment

USDJPY Sell: 76%, Buy: 24%

Featured Currency Pair of the Week (EURCHF)

While USDJPY and other cross Yen pairs were highly volatile, the Euro-Swiss Franc remained largely unaffected. It slightly retreated after reaching a high of 0.980CHF, lacking momentum for further rise. A drop to 0.9680CHF could be possible.

The trajectory will depend on whether it surpasses 0.9850CHF or falls to 0.9680CHF. Monitoring the situation is advisable.

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*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.