The Japanese Yen continues to flirt with its rumored intervention level against the US dollar with a full week until we see key inflation data and the BoJ’s Monetary Policy Meeting. Recall that the BoJ raised its policy rate last March to come off decades of Zero Interest Rate Policy in an effort to normalize monetary policy amidst signs that the economy has reflated and to encourage pay increases. This said the main driver here remains to be US policy direction as the BoJ move is seen mostly as symbolic with no further tightening in the medium term even as traders and investors are forced to reassess earlier bets of an early monetary easing by the US.
Resistance:
- 156.022 – Minor: Fibonacci Expansion swing from 4/05/24
- 155.000 – Strong: Psychological (rumored intervention level
- 154.780 – Moderate: Consolidation High
Support
- 153.588 – Moderate: Consolidation Low
- 152.708 – Minor: 20D Moving Average
- 152.000 – Strong: Previous Decade Highs 2022/23
With the threat of intervention looming we will be interested in small shorts as we approach the 155.000 level or at the break of the day’s low at 154.43 for a quick stab at last weeks lows. Just keep a tight stop and reverse above the 155.00 region as we risk dollar bulls running the pair to new multi-decade highs amidst the reassessment of dollar shorts and geopolitics.
