USD/JPY Slides as Verbal Intervention Takes Hold
USD/JPY Analysis
The pair pauses its 10-day rally, which led to 24-year highs and sparked a series of verbal interventions by Japanese officials. Earlier today, Bank of Japan Governor Mr Kuroda warned that "sharp currency moves are undesirable" [1] according to Reuters, but no action has be taken so far.
Meanwhile markets continue to expect another outsized move by the Fed and Chair Powell stuck to the script yesterday, vowing to "act now forthrightly strongly as we have been doing and we need to keep at it until the job is done". [2]
The greenback eases today though and USD/JPY loses more than 1% at the time of writing, breaking below the EMA100 and the 142.49 level we had mentioned in our previous analysis. This creates risk for further correction towards 139.40-138.83, but fresh catalyst will likely be required for a breach.
This includes the 38.2% Fibonacci of the rise from August, above which the any decline is viewed as shallow correction that allows for higher highs. The current pullback is already oversold in the short-term and bulls have not lost broader control. As such we can see a push for 144.99, although 147.90 has a higher degree of difficulty at this stage.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 09 Sep 2022 https://www.reuters.com/world/asia-pacific/japan-finmin-says-no-options-ruled-out-forex-boj-kuroda-meets-pm-2022-09-09/ | |
| Retrieved 28 Sep 2023 https://www.cato.org/events/40th-annual-monetary-conference |
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