In late-January it was the stunning sell-off in USD/JPY that drove a decisive move in the USD which, in response, drove breakouts in EUR/USD and GBP/USD. DXY moved deeply into oversold territory in late-January and it was the month of February when the currency built an ascending triangle and that led into the March breakout.
Bulls were large and in-charge even through the current daily bar's open, but so far today, there's been another stunning turn-around in USD/JPY and this has had a similar effect of driving the US Dollar lower even though rate cut expectations in the US are getting priced-out.
This sets up for what could be a dramatic Friday as these 'Yen-tervention' themes tend to pop up around a weekend, very similar to that late-January episode. Whether or not it's an actual intervention is probably more debatable as the reality is this is a very crowded trade and just a hint or whiff of chance can compel profit taking, especially when that 160.00 line in the sand has been such a tenuous spot for bulls even going back to 2024.
If we do see the USD/JPY sell-off stretching like an 'up the stairs, down the elevator' move, this can quickly bring back to life EUR/USD and GBP/USD strength. In that scenario, it's the 151.95-152.50 zone that's of interest for USD/JPY support as that's where the past two sell-offs have stalled and then eventually turned around. - js
Bulls were large and in-charge even through the current daily bar's open, but so far today, there's been another stunning turn-around in USD/JPY and this has had a similar effect of driving the US Dollar lower even though rate cut expectations in the US are getting priced-out.
This sets up for what could be a dramatic Friday as these 'Yen-tervention' themes tend to pop up around a weekend, very similar to that late-January episode. Whether or not it's an actual intervention is probably more debatable as the reality is this is a very crowded trade and just a hint or whiff of chance can compel profit taking, especially when that 160.00 line in the sand has been such a tenuous spot for bulls even going back to 2024.
If we do see the USD/JPY sell-off stretching like an 'up the stairs, down the elevator' move, this can quickly bring back to life EUR/USD and GBP/USD strength. In that scenario, it's the 151.95-152.50 zone that's of interest for USD/JPY support as that's where the past two sell-offs have stalled and then eventually turned around. - js
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.