FX intervention discussions have resurfaced, but will they be effective in supporting the struggling Japanese Yen (JPY)? The USD/JPY pair is currently hovering around the psychological level of 160.00. Meanwhile, the EUR/JPY pair has shown a morningstar candlestick pattern, indicating the potential for further upward movement.
In terms of fundamentals, the Japanese Yen is facing scrutiny as the Bank of Japan (BoJ) Governor Ueda opted for a cautious approach at the June BoJ meeting due to global geopolitical uncertainties. Despite past interventions by the central bank, the JPY is still under selling pressure.
Recent statements from Japanese officials, including FX diplomat Masato Kanda, have not had a significant impact on the JPY. Moody’s Analyst Christian De Guzman suggested that the BoJ is unlikely to raise interest rates soon, adding to the uncertainty surrounding the JPY’s future.
Looking ahead, key data releases including US PCE data and Japanese unemployment and inflation figures could influence JPY pairs. Geopolitical tensions, particularly in the Middle East, and the outcome of the French Parliamentary elections may also impact the market.
From a technical perspective, the USD/JPY pair closed last week in a bullish manner, signaling potential upward momentum. Immediate support levels are at 158.300 and 157.739, while a break above 160.00 could lead to further gains.
On the other hand, the EUR/JPY pair closed above a key resistance level at 170.00 and displayed a morningstar candlestick pattern on the weekly chart, suggesting a bullish outlook. Immediate support turned resistance is at 170.00, followed by 168.00 and the 100-day MA at 165.63.
Lastly, the GBP/JPY pair also closed with a bullish engulfing candle last week, surpassing the 200.00 handle. Resistance levels are at 203.86 and 205.00, while a breach of 200.00 could lead to a retest of the 50-day MA around 197.50.
Overall, the JPY pairs are facing uncertainty amid geopolitical tensions and central bank policies, making it essential for traders to closely monitor key data releases and technical levels for potential trading opportunities.