USD\/JPY has an option expiry at the 148.00 level on 28 July at 10am New York time. This does not attach to any technical levels, but may influence price behaviour before the expiry later in the day. <\/p>\n
Market attention remains on trade developments, particularly the US-EU trade negotiations. There are few other prominent events scheduled at the start of the week.<\/p>\n
We see that large option expiries can influence short-term price action, potentially pinning the currency pair to a specific level. While the 148.00 level mentioned is now in the past, traders should be watching for similar large expiries, such as recent notable interest around the 157.50 and 158.00 strikes. These clusters can act as a magnet for price, especially when major economic data is not being released.<\/p>\n
The broader market focus remains on the policy differences between the Federal Reserve and the Bank of Japan. Recent US inflation data, like the core Personal Consumption Expenditures (PCE) index which cooled to 2.6% annually, suggests the Fed may have room to cut rates later this year. However, comments from officials like Chairman Jerome Powell emphasize a data-dependent approach, creating uncertainty.<\/p>\n
This contrasts sharply with Japan, where officials are growing concerned about the yen’s weakness. We should be on high alert for intervention, especially as USD\/JPY hovers near the 158 level, a zone that triggered multi-billion dollar yen-buying by authorities in late April and May 2024. The actions of Finance Minister Shunichi Suzuki and statements from Governor Kazuo Ueda suggest their tolerance for further depreciation is low.<\/p>\n
Given this, we believe traders should be cautious about chasing the pair higher, as the risk of sudden, sharp downturns from official action is significant. Selling volatility through options might be appealing due to the pinning effect of expiries, but holding long put options could be a prudent hedge against intervention. This environment demands a strategy that accounts for both periods of calm and the potential for abrupt price shocks.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/JPY option expiry at 148.00 may influence price; focus remains on US-EU trade talks.<\/p>\n","protected":false},"author":62,"featured_media":17043,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27410","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27410","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=27410"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27410\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17043"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=27410"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=27410"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=27410"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}