Is USD/JPY Going Higher Now That BOJ Is Out Of The Way?
Skerdian Meta • 1 min read
The USD has experienced heavy pressure over the last week or so and the JPY was the first to take advantage of it. It started to climb against the Buck (USD/JPY going down) before the USD downhill even started.
The USD started tumbling after Yellen's testimonial last Wednesday and Friday's miss in US inflation and retail sales numbers. So, this forex pair offered us a sign that another wave of weakness was due for the USD.
We saw this pair decline around 300 pips in the last week after a doji candlestick formed in the daily chart on Tuesday last week.
Nevertheless, today we see that the price is reversing. The BOJ (Bank of Japan) stressed again today that they will keep the monetary policy running loose until they reach their inflation target of 2%.
From what I heard from BOJ chief Kuroda and judging by the economic data, that won't happen anytime soon.
The daily chart is forming a bullish pattern. Yesterday's daily candlestick closed as an evening star, which is a reversing signal after a downtrend. The stochastic indicator is also oversold. This means that the downtrend we have seen over the last several days has come to an end.
I was waiting for the price to reach lower, given the recent USD weakness, but the BOJ precipitated things and we're in reversal mode now. I'm looking to find a nice place to enter long, so keep an eye on our forex signals for a long term trade.