USDJPY to 146... But intervention risks? 🤔

2023年7月4日

Hey Traders! 👋

For Day 40/100 of our challenge, we will look at USDJPY long idea and how we can trade it despite being "overextended"

Technicals:
- Still in an uptrend
- 145 resistance formed
- 144.2 support is being tested and holding well
- Expecting 144.2 to hold as support
- Break and retest above 145 offers more upside into 146

Fundamentals:
- Fed has been doing a good job in its hawkish narrative despite many factors going against. Keep in mind that the Fed always did what they said they will. And they're saying 2 more rate hikes left this year. The market has not yet priced this in and is still skeptical about it. Which offers more un-priced opportunities of upside potential.

- BoJ has been whispering about FX intervention with JPY's fast-paced depreciation recently. However, reaction on 145 hasn't been as violent. This prompts an idea that the BoJ is willing to give some more downside room before officially acting on the intervention. Additionally, the Fed remains hawkish and inflation relatively sticky - not the most effective time for BoJ to intervene.

Anyways, that's quite loaded. Tell me what you think of USDJPY on your end.

Wishing you a profitable week as always 🥂