Yen depreciation: Be wary of official intervention.

Winkelmann

Forex

Summary:

The recent upward trend of USD/JPY has slowed, and official intervention may cause the yen to rebound.

SELL USDJPY

EXP

TRADING

161.839

Entry Price

161.400

162.200

161.916 -0.017 -0.01%

0.0

Pips

Flat

161.400

Exit Price

161.839

Entry Price

162.200

Fundamentals

The dollar index hit a 13-month high over the past week as market bets on the Federal Reserve shifting to interest rate hikes continued to rise, coupled with geopolitical safe-haven demand, which also supported the dollar against the yen, keeping it hovering around 162.

However, since last Friday, with the latest key inflation data released by the United States only meeting expectations and oil prices falling, market expectations for a Fed rate hike have cooled slightly, and the dollar index has also fallen. In addition, the dollar-yen pair is still hovering around 162.0, a 40-year high, and the market remains wary of possible intervention by Japanese authorities, and the possibility of a rapid short-term rise in the yen cannot be ruled out.

Technical aspects

Yen depreciation: Beware of official intervention_1

Looking at the 1-hour chart, USD/JPY has clearly stalled below 162.0, showing some signs of overbought conditions. The upward momentum is weakening, and the risk of a pullback is gradually increasing. Currently, USD/JPY has clearly stalled and is showing signs of overbought conditions. In the short term, it may be affected by intervention and experience a rapid pullback.

In terms of trading strategy, one could try shorting around the price of 162.0, with a target of around 161.4 and a stop-loss above 162.0.

Trading advice

Trading direction: Short

Entry position: 162.0

Target price: 161.4

Stop-loss level: 162.2

Downside support levels: 161.4/161.0

Upward resistance levels: 162.0/162.5

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