The yen has slid to a 40-year low against the dollar, pushing USD/JPY above 163. The U.S. Treasury has warned about excessive volatility and is calling for more Bank of Japan hikes, while traders brace for possible intervention. USD/CAD is the only G10 currency gaining against the dollar this week.
The yen has fallen to a 40-year low against the dollar, with USD/JPY trading above 163. The currency is down 51% since 2011, and that slide is driving some of the most notable setups in G10 FX right now.
Canada's dollar bucks the trend. USD/CAD is the only G10 pair gaining against the dollar this week, supported by a 6.2% surge in oil prices and strong retail sales.
The U.S. Treasury has warned about the yen's swings — "excessive volatility" — and is calling for more Bank of Japan rate hikes. Traders, meanwhile, are bracing for possible intervention.
Beyond that, the BOJ's next move and possible government intervention remain wildcards, and the yen's undervaluation is historic. Technical signals on the pair read as strong buy across all timeframes, but overbought conditions and the risk of intervention make it a high-volatility, high-risk play.
Oil supply shocks are supporting the Canadian dollar, while retail sales and trade war rhetoric add fuel. USD/CAD shows a strong buy setup backed by oil and data, and if oil remains bid, CAD could keep outperforming.
Both major European pairs are under pressure: EUR/USD sits in a strong sell trend while GBP/USD trades at multi-month lows. Short setups dominate unless the ECB or the BOE surprises.
Political changes in the UK and the ECB's hawkish tilt could jolt EUR/GBP and GBP/USD. Overbought signals on several pairs mean reversals can be sharp.
Source: Investing.com
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