Product: USD/JPY
Prediction: Increase
Fundamental Analysis:
The US dollar is trading near the zone where the Japanese government previously intervened to support the yen. Japan's top currency official has warned of unlimited resources for forex intervention against excessive currency moves. Although the technical trend is bullish, USD/JPY is a unique case due to the high risk of market manipulation by Japanese authorities. Traders should be cautious about assuming the pair will continue its uptrend, as government intervention could disrupt the market's natural dynamics.
Technical Analysis:
The USD/JPY pair has regained its upward momentum, breaking above the 158.25 temporary top. The choppy rise from 151.86 has resumed, with the pair now targeting a retest of the 160.20 high. However, the upside may be limited on the first attempt. In the broader perspective, the price movements from the 160.20 medium-term top are considered a corrective pattern within the larger uptrend from 150.25. Another rally is expected to eventually break through the 160.20 level and continue the broader uptrend. That said, a decisive break below 150.87 could suggest a larger correction is underway, potentially targeting the 146.47 support level next.
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