USD/JPY, EUR/JPY FORECAST:

• Japanese GDP Posts Upside Shock however the Yen Continues to Slide.
• Finance Minister Suzuki Affords Nothing New When Quizzed on Potential FX Intervention, however High FX Diplomat Kanda Says He’s Monitoring the Scenario Intently.
• IG Consumer Sentiment Exhibits Retail Merchants Extraordinarily Bearish on Each USD/JPY and EUR/JPY.
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The Yen continued to slip in opposition to the Buck and the Euro this morning regardless of a constructive GDP print and feedback from Finance Minister Suzuki round FX intervention. The feedback from Finance Minister Suzuki sounded all too acquainted as if from a script, having heard the very same phrases/phrases previous to final 12 months’s intervention and this 12 months as properly.

JAPAN FINANCE MINISTER ON INTERVENTION AND GDP DATA

The constructive GDP information out from Japan this morning means the worlds third largest economic system has now posted 3 consecutive quarters of enlargement. The YoY print annualized got here in at 6% in Q2 in comparison with annualized progress of two.7% in Q1.

Finance Minister Suzuki acknowledged that it stays key for foreign money markets to mirror the underlying fundamentals and transfer in a steady vogue. Minister Suzuki reiterated the continuing rhetoric that no FX ranges are being focused however relatively speculative and undesirable strikes might end in intervention. Deputy Finance Minister and High Forex Diplomat Masato Kanda acknowledged he’s monitoring the markets with a way of urgency and would take applicable steps in opposition to extreme foreign money strikes.

Supply: DailyFX

ZEW sentiment information got here out earlier as properly with the sentiment index coming in constructive, however the present situations stay a priority. A uncommon constructive right here which may assist EUR/JPY and USD/JPY transferring ahead is that survey respondents by and enormous don’t anticipate any additional fee hikes within the Eurozone or america.

Later in the present day we do have US retail gross sales information and a few Fed audio system which may have an effect on USDJPY because it continues to advance above the important thing 145.00 deal with.

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TECHNICAL OUTLOOK AND FINAL THOUGHTS

USDJPY is on a tear on the minute pushing towards the resistance space round 146.50. There was a slight pullback as we method the US open with the Greenback Index retreating from the important thing confluence space and 200-day MA. The query stays whether or not that is sustainable? There may be help as properly across the 102.30-102.10 space offered by the 50 and 100-day MAs which may assist hold the Greenback supported ought to the index try and push decrease.

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As I’ve talked about over the previous couple of weeks, FX intervention from Japanese authorities stays a risk. The problem is there isn’t a warning or signal as to when this will happen with Japanese authorities saying one factor however doing the exact opposite of late. Barring intervention, I truthfully don’t see some other cause to anticipate a major push to the draw back with any push decrease probably to offer bulls with one other alternative to affix the pattern.

USD/JPY Every day Chart – August 15, 2023

Supply: TradingView

EURJPY

EURJPY has lastly rallied into the 159.00 deal with earlier than a slight pullback and now eyeing a break increased towards the important thing psychological 160.00 mark. Trying past the 160.00 deal with and there isn’t a lot when it comes to important resistance holding the pair again from testing multi-year highs across the 170.00. Just like USDJPY nonetheless, I do anticipate the Japanese authorities to intervene ought to we see an aggressive transfer above the 160.00.

EUR/JPY Every day Chart – August 15, 2023

Supply: TradingView

IG CLIENT SENTIMENT

IGCSshows retail merchants are 77% Web-Brief on EURJPY.

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Written by: Zain Vawda, Market Author for DailyFX.com

Contact and comply with Zain on Twitter: @zvawda