• USDJPY edges lower as geopolitical events monopolize market sentiment

• Calmer sessions recently but there is still high risk of intervention

• Momentum indicators continue to send mixed signals

USDJPY is recording a negative session today as market participants’ attention is mostly on the geopolitical front and the increased risk of another oil price rally. USDJPY has been experiencing quieter sessions lately, but the intervention threat remains at large as the pair is still hovering a tad below the 150 threshold.

With today’s hanging man candlestick considered a strong bearish signal, the momentum indicators are still mixed. The Average Directional Movement Index (ADX) is stuck below its 25 threshold and thus pointing to a trendless market. On the flip side, the RSI has completed 2.5 months above its 50-midpoint, confirming a strong bullish tendency in the market. More importantly, the stochastic oscillator has managed to climb again above its moving average, and it has returned to its overbought territory. This move is seen, on face value, as a bullish signal.

Should the bears decide to take over the market reins, they could try to push USDJPY below the 147.54-147.71 area, which is populated by the August 11, 1998 high and the 50-day simple moving average (SMA). The 78.6% Fibonacci retracement of the October 21, 2023 – January 16, 2023 downtrend at 146.65 could be on the bears’ radar, with the next support area potentially coming at the busier 144.49-144.99 range.

On the other hand, the bulls are trying to stage a move higher but avoid a reaction from the Japanese authorities. They could have another go at overcoming that October 3, 2023 high at 150.15 and, if successful, record a new 2023 high. Even higher, the October 21, 2022 high at 151.94 appears to be their ultimate target.

To sum up, USDJPY bears are trying to engineer a sell off amidst quieter trading sessions, taking advantage the bulls’ hesitation due to the intervention threat from the Japanese government.