As we indicated on the 28th in our video on the USD/JPY, intervention from the Bank of Japan (BoJ) sent this pair much higher. As we predicted, the intervention sent this pair up a couple of hundred pips from around the 75.8 mark to the current level of 77.94. At one stage this pair reached as high as 79.51 on markets.com which would have been a nice profit if you had followed out prediction.
Given such a significant rise we would now stay out of this pair as any further buying of the USD/JPY would be chasing the trade and should be avoided. Once BoJ intervention stops than the pair may lose some support and a pull back is possible. The key to understanding this pair is to look for BoJ intervention every time the currency gets sold off at around the 75.80 level. Once intervention begins, prices can move suddenly and you definitely don’t want to be caught selling this pair short when this happens.
For the reasons stated above, this pair will remain a scalping pair but some profitable trading opportunities might arise in the future if you continue to monitor in. As always, we will keep you updated with videos and articles.
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