USD/JPY in the crosshairs with US CPI in focus | Forexlive
Intervention? What intervention? Suddenly, the move by Japanese authorities last month is seemingly ignored as traders continue to push the agenda for a move higher in USD/JPY.
Sure, the MOF and BOJ have ammunition but that doesn’t mean that they should be wasting it. Add to the fact that if they keep throwing little pot-shots at the issue, their intervention will lose more effectiveness each time. Anyway, let’s take a look at the technicals instead now.
The pair is running up to its highest levels since 1998 with the high back then standing at 147.67. That is certainly within reach now and it begs the question, where exactly is the next line to be drawn by Japanese authorities?
From a technical perspective, a break above the 1998 high points to 150.00 next and that is another big psychological level for traders to work towards and play around with.
Verbal threats like the one today are essentially worthless at this point so I would wager that Japan officials are instead going to be watching the US CPI data later today very, very closely.
If the data comes in hot again, we might expect another round of intervention to try and stem the advance in USD/JPY from quickly overshooting towards 150.00 next. But at the end of the day, it’s a game of trial and testing for the most part now is it not? I mean, last month 145.00 was the key level and now, we’re all quite comfortable settling above that.