USDJPY (Dollar / Yen)

💸 #USDJPY Analysis
🕓 Time Frame: 4HR
🔼 Status: Bearish
📆 22/07/2024

Current Market Situation:
The USD/JPY pair is declining due to a weaker dollar and ongoing interventions by Japanese authorities, which continue to strengthen the yen and exert downward pressure on USD/JPY. Additionally, funds are reducing their short positions on the yen.

Key Observations:
Interventions in Japan: Japanese authorities' interventions have positively impacted the yen, leading to a decline in USD/JPY.
Short Position Reduction: Investment funds are decreasing their short positions on the yen, further supporting its strength.

Technical Outlook:
Medium-Term Support: Below the current levels, the USD/JPY pair is expected to move towards the medium-term support at ¥154.50, a level that provided support in early June.
Volatility: Traders should exercise caution due to the inherent volatility of this pair.

Recent Market Activity:
Sharp Drop: Earlier this month, a mysterious sharp drop in USD/JPY sparked speculation of intervention after the yen rose about 3% against the dollar.
Speculation: While there has been no official confirmation from local officials or the Bank of Japan, speculators are closely watching for potential intervention.

Conclusion:
The USD/JPY pair is experiencing downward pressure due to a combination of a weaker dollar and Japanese interventions. The pair is likely to test the support level at ¥154.50, and traders should be cautious of the volatility associated with this pair.