-1696239688.png)
JPY Sell-Off Continues
USDJPY is trading at 11-month highs following early buying in the European session on Monday. The market is now fast approaching a test of the 2022 highs around 151.81. Despite speculation earlier in the year around potential BOJ intervention, the central bank has yet to take any actions to help strengthen JPY. Instead, in recent commentary the BOJ has signalled that it will patiently maintain its easing stance in order to keep the economy buffered. With the BOJ insistent on maintaining an easing stance, there appears little to deter JPY bears from staying short the currency for now.
Keep an Eye on BOJ
However, with JPY shorts now highly stretched, it is worth proceeding with caution. We’ve heard recently from Japanese officials (both govt and BOJ) regarding FX moves and the need to monitor any excessive moves. Additionally, in the latest BOJ summary of opinions released today, we learned that the BOJ last month discussed the conditions for exiting monetary easing. March 2024 was earmarked as a crucial time for the bank to assess its policy and make any adjustments. Still for now that means USD has room to run further against the currency though we might well expected to some pushback if those 2022 highs are tested.
Technical Views
USDJPY
The rally in USDJPY has seen the market pushing out above the top of the bull channel. With price now in touching distance of the 151.83 2022 highs it’s worth noting the bearish divergence we’re seeing in momentum studies, suggesting potential reversal risks. To the downside, 145 remains the key support to note with the bull trend intact while we hold above there.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.