After the largest intervention in decades from both the American and Japanese governments, dollar-yen now seems to have stabilised around ¥157.50. According to official data, Japan spent more than ¥5 trillion on 31 July shoring up the yen in addition to American operations earlier last week. Below target inflation and lacklustre GDP growth in Japan in recent months make more hikes by the BoJ in the next few months questionable. However, lower expectations for the Fed to hike twice before the end of the year might delay the next push up to ¥160.

The lack of major change in basic fundamentals and spike in buying around the interventions last week might suggest that the general uptrend could continue although perhaps with less momentum than earlier this summer. ¥160 remains an obvious potential target but both the 200 and 100 SMAs are potential dynamic resistances before there. Strong oversold signals from both the slow stochastic and Bollinger Bands suggest an ongoing bounce.

3 August’s large tail showed a clear rejection of a move below ¥157. Another serious attempt to push below there would probably need a weaker NFP and possible lower inflation next week too. However, immediate further intervention, however unlikely that might seem, could invalidate this analysis, so traders should continue to watch for further such operations as before.

This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.