The Japanese authorities did it again: for the third time this year, they intervened in the markets and sent USD/JPY 400 pips higher. EUR/USD wasn’t immune to this massive dollar buying and lost the 1.40 line, and more importantly below support at 1.4030.
This is a unilateral intervention by the Japanese authorities, without any external coordination. It came after USD/JPY ticked even lower once again, and touched 75.31. This is what triggered the Japanese officials to act, that will not stop until “satisfied”. Are they following the Swiss footsteps?
“I’ve repeatedly said that we’ll take bold action against speculative moves in the market,” Japanese Finance Minister Jun Azumi said to reporters today in Tokyo after the government intervened unilaterally. “I’ll continue to intervene until I am satisfied.”
From Bloomberg. The massive action sent dollar/yen to 79.50 before settling at 79.20.
There were already many doubts about the strength of the deal made in the EU Summit. EUR/USD was already ticking down on Friday after the massive rally on Thursday, and dipped under 1.4150.
The move by Japan sent the pair tumbling: it deteriorated and gradually lost support at 1.41 and 1.4030, before edging below 1.40. Note that 1.4030 is a more important line than the round number of 1.40. Support below this line appears at 1.3950.
For more lines and events in this busy week, see the EUR/USD forecast.Get the 5 most predictable currency pairs