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EURJPY 4 HOUR CHART – PATH OF LEAST RESISTANCE
If you want to be short JPY but are worried about intervention (i.e. USDJPY 155), one way to do so is via the crosses, such as buying EURJPY.
Why?
The answer is simple. There is less likely to see intervention in a cross than in USDJPY and why I call it the path of least resistance. .
AUDJPY 4 HOUR CHART —
AUDJOY is back in familiar territory after last week’s phantom spike to the downside.
On this chart, expect support as long as it trades above .99.00 but would need to clear 100.01 to put the key 100.80 resistance in play.
Note AUDJPY has moved up mainly on the bounce in AUDUSD while USDJPY has barely moved.
This is an e3xmaple pof using crosses to trade spot and following the path of least resistance with USDJOY still reluctant to challenge 155.
USDJPY 4 HOUR CHART – Stalemate
This caught my attention
The latest positioning data from U.S. futures markets showed hedge funds and speculators increased their aggregate net short yen position in the latest week to a new 17-year high. (Reuters)
… despite the threat of intervention
As the chart shows, the bottom of the range was extended after a (false) intervention scare while the top end represents a 34-year high.
For Monday, there seems no catalyst for an attack of 155 but will stay on the radar as long as 154+ trades.
USDJPY 4 HOUR CHART – TRAPPED FOR NOW
With Japan (and S Korea) discussing the strong dollar with the US, the intervention threat stays on the table. This suggests tacit approval should Japan choose to intervene on its own.
However, given the fundamentals (i.e. interest rates) and a generally strong USD, intervention would likely be a questionable strategy and seen as a stopgap.
With that said, it pays to be on alert after the IMF/World Bank meetings end.
Lookjing at the chart, the current range is 153.87-154.77 but 155 is clearly the market line in the sand,
USDJPY 1 HOUR CHART =Another 34-year high
As noted here yesterday, 154.-155 is a sticky zone with the top end as a pivotal level and potential BoJ line in the sand.
So far the market is showing no fear of the BoJ and is again taking the path of least resistance by selling JPY on its crosses (e.g. EURJPY, GBPJPY) where the BpK is less likely to intervene,
For intra-day traders, look for the “50” level (154.50) to be pivotal in the days ahead in determining whther the market goes after 155.
USDJPY 30 MINUTE CHART- UNCHARTERED WATERS
USDJPY TRADING TO ANOTHER 34-YEAR HIGH JUST BELOW 154… AS I NOTED ON THE BREAK OF 152, THE NEXT POTENTIAL BOJLINE IN THE SAND WAS 155. THIS SUGGESTS 154-155, SHOULD IT TRADE, WOULD BE A NERVOUS ZONE
NOTE JPY WEAKNESS ON ITS CROSSES GIVING A BOD TO USDJPY.
USDJPY LIKELY KEEPS ITS BID IF IT CAN STAY ABOVE 153.50 (NOT SHOWN ON THIS CHART)
USDJPY DAILY CHART – Who’s afraid of the BoJ?
With the 151.97 line in the sand shattered, USDJPY is trading, not close to record but in unchartered waters. This leaves Japanese monetary authorities with nothing but verbal warnings for if they choose to intervene, there would be more than ample buyers lying in wait at lower levels.
This leaves the market wondering where the next line in the sand is. The obvious level is 155 but ahead of that is 153.50, midpoint of 152-155. On the downside, only back below 151.97-00 would slow the risk.
WITH USDJPY HOVERING JUST BELOW 151.97 IT IS WORTH READING THIS BLOG ARTICLE AS IT IS STILL VALID
Trader Alert: Would I Intervene in USDJPY If I Was in I was in the BoJ’s Shoes?
USDJPY 1 HOUR – BID BUT WARY OF INTERVENTION
All that matters in USDJPY is the 151.97 (suggests 152) and what night trigger intervention. It certainly isn’t a disorderly market in current conditions that would trigger intervention so it would have to be a level that is considered the point of pain.
Rising US bond yields (4.45% 10-year yield so far capping it) would normally see USDJPY if it wasn’t for the intervention threat.
Looking at this chart, there are layers of support all the way to 150.80 under normal conditions.
