Welcome to Extreme Investor Network, where we provide you with unique insights and valuable information to help you navigate the world of trading and investing. Today, we’re taking a closer look at the current intrigue surrounding the dollar-yen exchange rate and the potential impact of upcoming economic events.
While predictions for the funds rate this summer are still a key factor influencing the market, the possibility of intervention by the Bank of Japan or the Japanese government to support the yen has been gaining importance in recent weeks. Despite the BoJ’s move away from negative rates after 14 years, many expect the loose policy to remain in place for the foreseeable future.
At ¥151.95, USDJPY recently hit a 34-year high, and the next key level to watch is ¥155, a potential intervention point for the BoJ. Traders are likely to proceed cautiously if the price continues to climb towards this level, especially with important data like the NFP and inflation figures on the horizon.
Chart momentum has been weakening, with the price testing ¥152 for the third time since October. The slow stochastic indicator has been signaling overbought conditions since late March, and the Average True Range (ATR) has been declining, suggesting a possible correction could be on the horizon.
Typically, retesting key levels multiple times without a strong fundamental driver makes a breakthrough less likely. However, there’s no clear technical or fundamental reason for a reversal of the current uptrend at the moment.
If a retracement does occur, potential targets include the 50 SMA around ¥150, the 200 SMA near ¥148, and March’s low around ¥146.60. As the US releases important data in the coming days, we can expect volatility to ramp up significantly.
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