USD/JPY Forex Technical Analysis – Approaching 1998 Top at 146.780 Despite Intervention Warning

The Dollar/Yen is edging higher on Wednesday after hitting a multi-decade high earlier in the session despite Japanese policymakers’ warnings against investors selling off the Japanese currency. The Forex pair rose to a fresh 24-year high earlier in the day, raising speculation about a second round of intervention.

The U.S. currency rose to a level not seen since August 1998 during the Asian financial crisis, moving above levels that triggered intervention by Japanese authorities last month to stem excessive Yen weakening. Some traders are eyeing 146.780 as the next level that could trigger an intervention. Japanese officials intervened at that level in 1998.

At 06:09 GMT, the USD/JPY is trading 146.214, up 0.352 or +0.24%. On Tuesday, the Invesco CurrencyShares Japanese Yen Trust ETF (FXY) settled at $64.01, down $0.10 or -0.16%.

“We are closely watching foreign exchange moves with a high sense of urgency, and ready to take appropriate steps on excess moves,” Chief Cabinet Secretary Hirokazu Matsuno told reporters.

The comment came after Finance Minister Shunichi Suzuki was quoted by Jiji Press as saying there was no change in the country’s stance at all and that it would take necessary steps in the foreign exchange market if necessary.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The USD/JPY resumed its uptrend early Wednesday when buyers took out the September 22 main top at 145.900. A trade through 140.353 will change the main trend to down.

The minor range is 140.353 to 146.389. Its 50% level at 143.371 is the nearest support. A second minor support level comes in at 141.099.

Daily Swing Chart Technical Forecast

Trader reaction to 145.861 is likely to determine the direction of the USD/JPY on Wednesday.

Bullish Scenario

A sustained move over 145.861 will indicate the presence of buyers. Taking out the intraday high at 146.389 will indicate the buying is getting stronger. This could lead to a test of the 1998 top at 146.780.

The 1998 top at 146.780 could become resistance if Japan intervenes or it could be a trigger point for an acceleration to the upside if they don’t.

Bearish Scenario

A sustained move under 145.861 will signal the presence of sellers. If this creates enough downside momentum then look for a possible steep break into the first pivot at 143.371. If this rails then look for the selling to possibly extend into the second pivot at 141.099.

The second pivot at 141.099 is the last potential support before the main bottom at 140.353. Taking out this level will change the main trend to down.