Technical Analysis – Could USDJPY change course after the rumoured intervention?
October 4, 2023 7:27 am
USDJPY is edging higher today after yesterday’s tumultuous session
It continues to hover inside a wide ascending trend channel
Stochastic oscillator could be close to giving a bearish signal
USDJPY is in the green today as market participants are trying to find their foot following yesterday’s alleged intervention from the Japanese authorities. The pair continues to trade at extremely elevated levels and remains comfortably inside an upward trend channel.
However, the picture portrayed by the momentum indicators is not so clear cut. The Average Directional Movement Index (ADX) is edging lower but continues to show a weakening bullish trend. Similarly, the RSI remains comfortably above its 50-midpoint, spending 2.5 months in bullish territory. However, the stochastic oscillator is currently at a precarious position. It has broken below its moving average and looks ready to edge below its overbought region. Should this take place, it would be seen as a strong bearish signal.
Should the bears feel energized to stage a pullback, they would try to push USDJPY below the August 11, 1998 high at 147.71. Lower, the busy 146.15-146.65 area, defined by the 78.6% Fibonacci retracement of October 21, 2023 – January 16, 2023 downtrend at 146.65, the 50-day simple moving average (SMA) and the lower boundary of the upward trend channel, could prove a very strong support area.
On the flip side, the bulls are trying to digest the alleged intervention. Should they remain committed to recording new highs, they could try to overcome yesterday’s high at 150.15 and then potentially set a course for the October 21, 2022 high at 151.94.
To sum up, USDJPY bulls are still in control of the market, but they could be walking on thin ice as a JPY intervention threat remains at large.
USDJPY is edging higher today after yesterday’s tumultuous session
It continues to hover inside a wide ascending trend channel
Stochastic oscillator could be close to giving a bearish signal
USDJPY is in the green today as market participants are trying to find their foot following yesterday’s alleged intervention from the Japanese authorities. The pair continues to trade at extremely elevated levels and remains comfortably inside an upward trend channel.
However, the picture portrayed by the momentum indicators is not so clear cut. The Average Directional Movement Index (ADX) is edging lower but continues to show a weakening bullish trend. Similarly, the RSI remains comfortably above its 50-midpoint, spending 2.5 months in bullish territory. However, the stochastic oscillator is currently at a precarious position. It has broken below its moving average and looks ready to edge below its overbought region. Should this take place, it would be seen as a strong bearish signal.
Should the bears feel energized to stage a pullback, they would try to push USDJPY below the August 11, 1998 high at 147.71. Lower, the busy 146.15-146.65 area, defined by the 78.6% Fibonacci retracement of October 21, 2023 – January 16, 2023 downtrend at 146.65, the 50-day simple moving average (SMA) and the lower boundary of the upward trend channel, could prove a very strong support area.
On the flip side, the bulls are trying to digest the alleged intervention. Should they remain committed to recording new highs, they could try to overcome yesterday’s high at 150.15 and then potentially set a course for the October 21, 2022 high at 151.94.
To sum up, USDJPY bulls are still in control of the market, but they could be walking on thin ice as a JPY intervention threat remains at large.
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