The recent surge in the dollar seems to have paused, possibly due to a sense of exhaustion in short-term bullish catalysts and attention shifting towards events like the G20. Despite strong US economic indicators and rising bond yields driving dollar strength, there’s a perception that immediate new bullish factors for the dollar may be lacking.
On another note, as USD/JPY approaches 155.00, concerns about intervention from the Japanese government and the Bank of Japan are increasing. Meetings between financial authorities from Japan, the US, and South Korea during G7 and G20 gatherings appear to have garnered some understanding from the US regarding the implications of dollar strength on their respective currencies. While actual intervention depends on market dynamics, the signals sent seem to indicate a strong deterrent.
The market’s next moves remain uncertain amidst discussions at the EU summit and the potential for easing tensions between Israel and Iran. Economic data releases ahead include the Philly Fed Manufacturing Index, US Initial Jobless Claims, Leading Economic Index, and Existing Home Sales.
Given the circumstances, considering the resistance around USD/JPY 155.00 and the cautious stance from authorities, selling is being considered.
