It settled at 154.29 on Tuesday, with the yen halting its advance after a notable rise of nearly 3.2% in the previous two sessions. This move was prompted by growing concerns about possible coordinated monetary intervention between Japan and the United States.
The market was boosted by news that the Federal Reserve Bank of New York had requested USD/JPY levels from traders on Friday. At the same time, Japanese officials confirmed that they were in close communication with the United States on monetary policy and possible market actions.
However, data from the Bank of Japan (BoJ) suggested that Friday's sharp yen appreciation was unlikely to be due to direct intervention. This speculation intensified the market reaction and speculative positioning.
The yen continued to receive support from broad-based weakness in the US dollar, driven by rising geopolitical risks and trade uncertainties, as well as expectations that US President Donald Trump could replace Federal Reserve Chairman Jerome Powell with a dovish candidate, putting further pressure on the US currency.
Technical analysis
On the H4 chart, USD/JPY has formed a correction wave after the previous decline. Today, a continuation of the growth wave to the level of 155.00 is possible. After this rise, a rebound from the resistance level is expected, with the first target of a further decline at 153.00, followed by 152.00. This scenario is confirmed by the MACD indicator as the histogram is below zero and rising, and the signal line is likely to cross the histogram and turn up soon.
On the H1 chart, USD/JPY is testing the 153.80 mark and forming a wave of growth. If the price tests the 155.00 level and rebounds, further declines could be expected, with the first support at $153.00. The stochastic oscillator supports this as its signal lines continue to fall towards the 50.0 level. A break of this level would indicate a continuation of the downtrend.
Conclusion
USD/JPY has halted its rapid rise amid speculation over possible currency intervention. Despite a weaker US dollar and geopolitical risks, the yen's recent strength is being tested. Technically, while the immediate outlook points to a possible short-term rise to 155.00, a rebound and subsequent fall towards 153.00 could be on the horizon, depending on how market sentiment evolves.
By RoboForex Analysis Department
Disclaimer: Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
