USD/JPY Price Analysis: Bulls eye 145.10 and higher in the absence of intervention

BoJ intervention prospects raise prospects for a bearish correction in USD/JPY.
USD/JPY bears are lurking at resistance and eye a significant correction.

Ross J Burland FXStreet

USD/JPY edged higher on Wednesday with the US Dollar finding support ahead of a slew of key US events that included Wednesday's hawkish Federal Open Market Committee minutes that reinforced market expectations of another interest rate hike at the end of July.

Most Fed officials expected that the policymakers would eventually need to tighten policy further.
As a consequence, the US Treasury yields moved higher and added to earlier gains in the Greenback. ''Fed funds futures showed expectations of a 25 basis point hike at the end of a two-day policy meeting on July 26 rose to 88.7%, according to CME Group's FedWatch Tool,'' Reuters reported.

Indeed, USD/JPY has broadly moved higher in sync with the US 10-year Treasury yield. However, the market is also paying attention to the potential risk of intervention from the Bank of Japan. This opens the risk of a move lower in USD/JPY and the following illustrates a bearish technical scenario.

USD/JPY monthly chart

The monthly W-formation is compelling. This is a reversion pattern and if there is resistance here, then there is the possibility of a retracement back to the neckline that meets the 61.8% Fibonacci near 134 the figure.

USD/JPY weekly charts

On a weekly chart, this might play out as follows, allowing for the ebbs and flows on the way down as bears take on the dynamic trendline support towards 140.50 and 50 pips below the weekly 61.8% ratio near 141.50

(Overall bearish trajectory bias, resistance and support levels).

USD/JPY bullish weekly outlook

However, while on the front side of the trendline, the bulls are in charge and that leaves 145.10 and space to 152.00 technically up for grabs.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD slides below 1.3250 after failing to break through 23.6% Fibo

The GBP/USD pair meets with a fresh supply during the Asian session on Wednesday and moves away from a nearly two-week high around the 1.3275 region, touched the previous day. Spot prices currently trade around the 1.3235 zone, down 0.20% for the day, as traders look to speeches from Bank of England Governor Andrew Bailey and Federal Reserve Chair Kevin Warsh for a fresh impetus.

EUR/USD stays offered, breaks below 1.1400…again

EUR/USD adds to Tuesday’s slight losses and drops below the 1.1400 yardstick in the latter part of Wednesday’s NA session. The pair’s decline comes in response to the persistent recovery in the US Dollar, which seems to have met extra support following the cautious tone from Fed’s Warsh in his comments at the ECB Forum.

Gold recovers but sellers hold the grip

Gold keeps the bullish performance in place on Wednesday, although is now giving away part of its earlier advance past the $4,100 mark per troy ounce. The precious metal’s marked rebound comes despite the US Dollar’s bid bias, higher US Treasury yields across the curve and positive headlines from the Middle East.

Dogecoin vs Shiba Inu: DOGE and SHIB start July with similar setups

The cryptocurrency market shows subtle signs of rebounding on Wednesday after facing intense headwinds over the past few weeks, largely attributed to geopolitical tensions, macroeconomic uncertainty and risk-averse sentiment. Dogecoin (DOGE) and Shiba Inu (SHIB) are holding above pivotal support levels at $0.0700 and $0.0000040, respectively, suggesting investors are ready to reengage.

Warsh stays on message as inflation remains the Fed's top priority

At the ECB Forum in Sintra, Fed Chair Kevin Warsh largely followed the script, offering little to change the market’s current view on monetary policy.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.