Potential BOJ Intervention and Technical Setups on USDJPY

Jun 30

If you haven't heard the latest news, Japan's Finance Minister and the BOJ have differing views on the intervention of the Japanese Yen. The Finance Minister believes that FX intervention didn't work, while the BOJ has stated they are prepared to intervene at any time and could catch the market by surprise.

Having traded for 18 years, I'm quite familiar with what a market intervention looks like. If you believe the BOJ will intervene, then there are some interesting technical setups to consider.

Analysis:
1-Hourly Chart:
- Potential Head and Shoulders Formation: This pattern could signal a bearish reversal.

15-Minutes Chart:
- Bearish Shark Pattern Checkback: This setup allows us to capture similar targets with lower initial risk.

Strategy:
1. Head and Shoulders Formation:
- Monitor for Pattern Completion: Watch for the right shoulder formation and neckline break.
- Entry: On confirmation of the neckline break.
- Stop-Loss: Above the right shoulder.
- Target: Based on the height of the pattern projected downwards.

2. Bearish Shark Pattern Checkback:
- 15-Minutes Timeframe:
- Entry: Look for entry on the checkback of the Bearish Shark Pattern.
- Stop-Loss: Above the high of the checkback.
- Target: Aligns with the target from the head and shoulders pattern on the 1-hourly chart, allowing for a lower initial risk.

Key Points:
- BOJ Intervention: The potential for surprise intervention by the BOJ adds a fundamental catalyst to these technical setups.
- Risk Management: Ensure proper stop-loss placement to manage risk effectively.
- Confirmation: Always wait for confirmation of the patterns before entering trades.

What’s your take on USDJPY and the potential for BOJ intervention?
Do you see any additional opportunities or setups?
Share your thoughts and strategies below!