Takeaway

The presenter argues that Japanese Yen intervention risk is now a primary market driver following a significant USD/JPY decline. He believes the technical picture has turned bearish, with the pair breaking below its 2025 uptrend and testing a key pivot zone around 156.64. The upcoming U.S. Nonfarm Payrolls report is the critical near-term catalyst that could solidify this bearish momentum.

What the presenter said

• Intervention concerns for the Japanese Yen are back on the front burner after a massive decline in USD/JPY. [00:11]
• The previous decline in USD/JPY in July did not break the 2025 uptrend on a close basis. [00:23]
• The recent rally in USD/JPY failed at the 160.36-160.64 resistance zone, which represented a confluence of Fibonacci levels. [00:33]
• The current sell-off is now threatening to break the uptrend from last year. [00:54]
• A break and close below the 156.66-156.64 pivot zone, which includes the 200-day moving average, would keep the immediate downtrend in focus. [01:17]
• Reports of a BOJ rate check and comments from board member Takata have increased the odds of another rate hike this month, supporting JPY strength. [02:03]
• The near-term bearish invalidation level for USD/JPY is the 200-day moving average; a close above it would suggest a potential exhaustion low. [03:10]
• Tomorrow's U.S. Nonfarm Payrolls release is a major event risk, especially after yesterday's weaker-than-expected ADP report tempered Fed rate hike expectations. [03:49]

Trade ideas

None stated. The presenter's market view is bearish on USD/JPY, contingent on the pair staying below the 200-day moving average and the 156.64-156.66 pivot zone. Downside targets are initially seen in the 155 handle, followed by the 152 handle.

Levels and data cited

Price Levels (USD/JPY): * Resistance: 160.36 - 160.64 (61.8% extension and 61.8% retracement where the recent rally failed). * Resistance: 157.89 - 157.70 (2025 high day close, November high). * Support/Pivot: 156.66 - 156.64 (Objective yearly open, 61.8% retracement of yearly range). * Target: 154.90 - 154.78 (May low, 61.8% extension). * Target: 155.00 handle (Initial downside zone). * Target: 152.00 handle (January low, 2022/2023 swing highs, lower parallel). * Invalidation: A close above the 200-day moving average would invalidate the bearish view.

Data Cited: * ADP Report (yesterday): 38,000 vs 47,000 expected. * Nonfarm Payrolls (tomorrow): 58,000 expected. * Unemployment Rate (tomorrow): 4.1% expected. * Fed Fund Futures: Show a 68% probability of a rate hike this month.

Risks and what would invalidate this

• A daily or weekly close above the 156.66-156.64 level would invalidate the immediate downtrend.
• A material slowdown in U.S. labor markets (e.g., weaker than expected Nonfarm Payrolls) could temper Fed rate hike expectations, adding further downward pressure on USD/JPY.