USD/JPY Outlook
Dollar/Yen at the basic level
The USD/JPY pair is trading near the 159.00 level, its lowest since April 30, prompting investors to watch for potential intervention. Authorities in Tokyo intervened twice in late April and early May, causing the yen to rise by about 3.5% in the following days.
however, the currency has since lost about 7% of that gain.
According to a government source who spoke to Reuters on Monday, the Japanese government is likely to issue new debt to finance a planned supplementary budget aimed at mitigating the economic impact of the Middle East conflict.
On the U.S. economic front, expectations regarding the Federal Reserve have shifted significantly toward a more restrictive monetary policy, though market participants remained hesitant to bet on interest rate hikes.
This situation changed last week, as G10 expectations regarding the Federal Reserve saw a notable shift.
USD/JPY on the Technical Front
The USD/JPY pair is attempting to form a Shark pattern on the 4-hour chart, targeting the 160.00/10 levels, from which we expect the pair to retreat toward 158.00 and then 155.50.
There is a possibility of reaching the 161.20/30 levels, at which point the pair would form an extended shark pattern, and from there, the pair would begin to decline.
This bearish scenario would fail if the pair breaks above the 162.00 level.
If the pair pulls back before completing the pattern, it may be possible to buy the pair from the support levels of 158.00/127.90 to complete the harmonic pattern.
