USDJPY maintains its strong tone and trades near the 160 psychological barrier, with near-term movement slowing on Friday, compared to strong gains in the previous few sessions.
The pair is on track for weekly gains after remaining in the red for three consecutive weeks, with the technical picture on the daily and weekly charts being mostly bullish but in overbought territory on the daily chart.
On the other hand, the pair is pressing the 160 resistance area, which is often seen as a catalyst for intervention by the Japanese authorities, to prevent further weakening of the national currency.
From this perspective, we need to see the latest statements of Japanese Finance Minister Vin Minh, who warned against decisive action in the 160 area, which represents a verbal intervention and confirms Japan’s willingness to take action.
Bank of Japan policymakers will meet next Tuesday, with a decision widely expected to remain unchanged this time, mainly due to rising uncertainty over the situation in the Middle East and the yen’s path.
Japanese policymakers also remain concerned about import-driven inflation amid persistent yen weakness, adding to the view that the April 28 meeting’s decision may not be neutral, with the focus on vote counting.
After a unanimous 9-0 vote in March, any deviation from this configuration would be a hawkish signal that the Governing Council is laying the groundwork for rate hikes later this year.
Initial support is at 159.18 (10/20 DMA converging) followed by a more important level of 158.52 (23.6% Fibo of 152.26/160.46 high/recent range floor) a strong break of which exposes the next strong support at 157.60/30 area (recent high lows/38.2% Fibo).
On the other hand, the 160.00 and 160.46 areas (2026 high) offer strong resistance, protecting a very strong area at 161.95 (2024 pre-intervention high).
Accuracy: 159.85; 160.00; 160.46; 161.00
SOP: 159.18; 158.00; 157.60; 156.30
