The dollar saw a solid upside move following Monday’s beat in the ISM manufacturing PMI.
As a result many are expecting a similar beat in the ISM services or the NFP to see a similar reaction.
Even though that might be true in the very short-term, there is a risk dollar bulls need to keep in mind.
It should be no surprise to most readers that the USDJPY is inching closer and closer to the 152 level.
USDJPY close to 152 again
With last week’s meeting between the BoJ and MoF, many believe a move past 152 could spark some type of jawboning or intervention.
The risk with a very strong ISM services or NFP is that it pushes USDJPY into or above 152 and triggers Japanese officials to intervene.
So, if you are long the USD after solid data this week, keep a close eye on the USDJPY.
Remember when Japan intervene, they’ll be selling dollars and buying the yen. That means regardless of what pair you are trading it will negatively impact your dollar long positions.
