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USD/JPY Nosedives Amid Japan’s Intervention Speculation, US NFP Next

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Aayush Jindal

Key Highlights

  • USD/JPY declined heavily after it traded to a record high at 160.21.
  • It broke a major bullish trend line with support at 155.85 on the 4-hour chart.
  • Japan likely conducted its second currency intervention this week, according to a Bloomberg analysis of central bank accounts.
  • Oil prices extended losses and traded below the $80.00 support.

USD/JPY Technical Analysis

The US Dollar climbed higher above the 155.00 resistance zone against the Japanese Yen. USD/JPY traded to a record high at 160.21 before there was a sharp decline.

Looking at the 4-hour chart, the pair declined heavily below the 158.00 and 155.00 support levels. It even broke a major bullish trend line with support at 155.85. The pair spiked below the 100 simple moving average (red, 4-hour) and tested the 200 simple moving average (green, 4-hour).

According to a Bloomberg analysis of central bank accounts, Japan likely conducted its second currency intervention this week to protect against sharp losses in Yen.

USD/JPY tested the 153.00 support zone and recently corrected losses. However, the current price action suggests a high chance of more losses.

Immediate support is near the 153.50 level. The next major support is at 153.00 and the 200 simple moving average (green, 4-hour). If there is a downside break below the 153.00 support, the pair might test 152.00. The main support is now forming at 151.20. Any more losses might send the pair toward 150.00.

Immediate resistance is near the 155.50 level. The first key resistance is near the 156.20 zone. A clear move above the 156.20 resistance could send the pair further higher. In the stated case, the pair could drift toward the 158.00 level.

Looking at Oil, the price extended losses and it seems like the bears could aim for a move toward the $78.00 level.

Economic Releases

  • US nonfarm payrolls for April 2024 – Forecast 243K, versus 303K previous.
  • US Unemployment Rate for April 2024 - Forecast 3.8%, versus 3.8% previous.
  • US ISM Service Index for April 2024 – Forecast 52.0, versus 51.4 previous.
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