Treasurer Besant said so
- The G7 financial talks were constructive.
- He is confident that Bank of Japan Governor Ueda will guide monetary policy successfully.
- He added that “excessive” volatility in the Forex market is undesirable.
- He feels the fundamentals of the Japanese economy are strong
The initial reaction saw USDJPY move lower after the pair pushed above the 159.00 midpoint of the broader 158.00-160.00 trading range that capped price action from early March through the end of April. This break to the upside kept buyers in control in the short term, but the move is now being tested.
On the downside, the first major target comes near 158.60 – the low from yesterday’s North American session at 158.599. Just below that, the bullish 100 hour moving average comes in at 158.478. These two levels are now considered important indicators for the pair. A move below these levels would give sellers more confidence and shift control towards the downside.
The broader trend over the past few weeks still favors buyers. After a sharp bearish breakout on April 30 due to currency market intervention fears, the pair found support near 155.50 before extending to a new low around 155.00 on May 6. Since this decline, USDJPY has risen steadily, with only modest corrective pullbacks along the way.
Momentum strengthened again last Thursday when the pair returned above 158.00. Buyers then pushed the price through the 159.00 level during yesterday’s trading and again today, extending the bullish recovery.
For traders now, the key levels are clear:
- Supports: 158.60 followed by the rising 100 hour moving average at 158.48
- Resistance/Main upward pressure gauge: 159.00
Stay above 159.00 and buyers will remain in tight control. Pull back below the 158.60 level, especially the 100 hourly moving average, and sellers may start to regain momentum.
