USD/JPY: on the eve of the meeting of the Bank of Japan. Trading recommendations

 
 
 
 
 
 
 

"While choosing an appropriate position in monetary policy, the committee will continue to monitor the impact of incoming information on the economic outlook. The committee will be ready to adapt monetary policy appropriately as risks arise for the committee's goals," the Fed said yesterday.

Now the updated forecast assumes an increase in the key rate to 3.4% by the end of the year, which is still 1.65% below the current level of 1.75%.

USDJPY H1 Chart

The price broke the important short-term support at 133.44 (EMA200 on the 1-hour chart), making a kind of call for further decline.

USDJPY D Chart

This week turned out to be extremely volatile, and the publication of the decision of the Bank of Japan on rates is ahead, as well as 2 American trading sessions - today, when the weekly data from the American labor market will be published, and tomorrow, when the speech by Fed Chairman Jerome Powell (12:45 GMT). Obviously, the volatility in the market will remain until the end of tomorrow's trading day.

In the main scenario, we expect a rebound and resumption of growth from the current support level of 133.44. There is a strong upward momentum, fueled, among other things, by the growing divergence in the direction of the monetary policies of the Fed and the Bank of Japan. However, volatility in USD/JPY may increase sharply again tomorrow at 03:00 (GMT), when the decision of the Bank of Japan on the interest rate will be published. If there are no unexpected decisions from the Bank of Japan in the direction of tightening its policy, then we should expect a resumption of growth in USD/JPY.

USDJPY W Chart

Support levels: 133.44, 131.30, 130.24, 128.90, 126.55

Resistance levels: 135.00, 135.19, 135.58, 136.00

Trading recommendations

Buy Stop 133.50. Stop Loss 132.25. Take-Profit 134.00, 135.00, 135.10, 135.50, 136.00

Sell ​​Stop 132.25. Stop Loss 133.50. Take-Profit 132.00, 131.30, 130.24, 128.90, 126.55