There is going to be a lot of action in the forex market in the next 36 hours. In a little more than 12 hours apart from each other, two of the largest central banks will have to make some important decisions. The Bank of Japan (BOJ) will hold its meeting early in the morning tomorrow (or late in the afternoon today if you live in the Americas), while the FED will follow later in the evening.
Both these meetings are very important because the forex market has built high hopes for some sort of action from both banks. The BOJ is expected to dig further into the negative interest rates territory. On the other hand, the rate hike odds from the FED tomorrow are minimal, but as we have seen last week, there´s a feeling in the market which points to a rate hike.
Today though, a waiting game is taking place in the forex market and that´s totally understandable. Most forex traders picked their side last week, whether it is long USD, short USD, long JPY, short JPY or just deciding to stay on the sidelines.
A 40 pips spike is the most this forex pair could do in the last 12 hours
Yesterday the major forex pairs barely moved 40-50 pips and it seems similar today. There´s always that odd spike such as the 20 pip jump yesterday and the 40 pips jump this morning at the open of the European session, but from my experience, I can say that in general we´re going to watch paint dry. Since we are forced to play this waiting game, we´ll go through the levels and the possible scenarios for USD/JPY later on today.
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