The mood surrounding the pair this afternoon during the European session is far different than earlier, which drew concerns from several sources. “If the USD/JPY breaks 78.00, the market is bound to become increasingly nervous of a MoF/BoJ JPY-selling intervention”, wrote JP Morgan analysts pointing to political pressure from the US Treasury not to intervene in the FX market. “Indeed, this December report criticized the fact that intervention was conducted when volatility in USD/JPY was lower than that in the EUR/USD, which is still the case now”.
Having already broken resistance at 79.57, the cross is presently operating in the region of 79.60, advancing +0.14% at the time of writing. According to the technical analysts at ICN.com, the pair will encounter resistance levels at 79.80, followed by 81.10, and ultimately 80.30. In the event of a pullback, the pairs decline will be stymied by supportive means at 79.25, 79.00, and 78.80.