Japanese Yen Rebounds Following Intervention Threat

Fundamental Analysis

* Intervention Cue: The Japanese Yen has regained some strength, appreciating against the dollar as markets remain vigilant, anticipating possible intervention by Japanese authorities to prevent excessive depreciation. Japan’s near-zero interest rates create a significant rate differential with other major currencies, leading to the Yen being pressured globally. Due to the Yen’s weakness, foreign exchange intervention could be imminent. The government last intervened in May when USDJPY exceeded 160.

Technical Analysis

* Technical Breakout: USDJPY was traded lower while currently testing the support level 161.00. MACD which illustrate diminishing bullish momentum signal suggest the pair to extend its losses after it breaks below the support level.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 160.00 after it breaks below the support level 161.00. Conversely, a potential correction is also to be expected and the price could head towards 162.00.

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Potential Risks

Looking ahead, investors are eagerly awaiting the upcoming crucial data from the U.S Nonfarm Payrolls (NFP) report & Unemployment Rate for June, scheduled for release on Friday. This report will offer insights into the current labor market conditions and could offer indications regarding the possibility of Federal Reserve interest rate cuts.

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Monitoring

Stay updated on US and Japan data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.