Sell Signal Approaching or Is a New Highs On The Way?

Last week, there were fireworks across all JPY pairs, with each hitting multi-decade highs. Notably, EURJPY reached an all-time high, peaking at 171.5 before experiencing a sharp drop due to two rounds of intervention by the Bank of Japan (BOJ).


So, what’s next for this pair? This week, it’s been slowly creeping back toward the zone where the second round of intervention occurred last week, between 167 and 168.(see image below)




On the 4-hour chart, a similar sell pattern seems to be emerging. After the first intervention, the price slowly crept back up to the intervention zone before dropping again (second round of intervention).




You can see on this 4-hour chart how the price is inching back toward the 167 level. It dropped 300 pips from there on Friday. Above that, the price dropped heavily from 168.5, so will this pattern repeat, or will we see a return to 170 or above?

In the short term, I see a potential sell setup between 167.5 and 168.5. I'll be using my TRFX indicator on the 1-hour chart to find the right signals for a sell as we approach this zone.

I'll keep a tight stop-loss above 169.7, with a primary target at last week's low of 164, a good short-term goal.

In the longer term, we might see a retest of 171.5 before another significant sell-off. However, the JPY remains quite weak, making it tough to predict the long-term outlook. It's best to see if the price steadies at these levels over the coming weeks or if volatility spikes again, causing another crash.

For now, I'm favoring a short-term sell setup if the right signals appear.