The pair is keeping little changed on the day, sitting around 148.85 at the moment. For a pair that is caught in the midst of high volatility recently, the light movement today is reflecting a calmer tone as we look towards European trading.
Even if they may deny it, the signs in the price action since Friday suggest that Japan has at least intervened twice to try and push back against the market. The Monday move was a notable one as we saw the pair fall from 149.60 to 145.48 but that was quickly bought up. There was another dip late in the day here but it was much shallower and also just as swiftly bought back up.
That continues to underscore the prevailing sentiment in the pair and here's how the near-term chart is shaping up:
To be honest, I would not put too much emphasis on certain aspects involving the technicals at the moment as it is more so about the psychology and trading sentiment in the pair. Japanese authorities are looking to step in as we get closer to 150.00 while the bulls are not showing much fear in buying up any intervention dips.
As such, it will now come down to the appetite by Japan if they really want to get stuck in up against the market. The issue here is that with every attempt that is roughly similar in size, the interventions will slowly lose more effectiveness. As such, they can only draw a hard line for so long before the tide washes it away.
All eyes will be on the BOJ policy meeting this week and if there is no change to the status quo, that will put Japan in a really, really rough spot to try and keep fighting in this battle.
