Please do refer to my recent posting on the same topic from below link:-
Yesterday, we observed Japanese yen and dollar were converging again in a volatile session, caused by the uncertainty surrounding the ruling Japanese politics. The ruling coalition lost control of the upper house leaving the country with the prospect of a coalition government without the force to push through Prime Minister Kan’s tough financial reforms.
The yen has rallied this afternoon though after Kan’s(Japan's PM & Ex-Finance Minister) insistence that he would stay on as Prime Minister.
The Yen lacked positive news to support improved rate increase expectations. We question the sustainability of the Japanese Yen’s advance,. The highly anticipated US Consumer Price Index data and the US Federal Open Market Committee rate decision will likely dominate Dollar/Yen price action, while the Japanese Yen could also move on any surprises out of the upcoming Bank of Japan rate announcement.
No rate changes expected, but as usual, the surprises come from any references to the Japanese Yen. FX markets had recently forced the JPY to its highest levels in over a decade, but very quickly reversed course on vague threats of FX market intervention from the Ministry of Finance and Bank of Japan. Given deflationary headwinds for the Japanese economy, the central bank is staunchly against further Yen appreciation. Whether or not they comment on the fact may bring volatility in the week ahead.
Despite the near term breakdown in the negative correlation between the Yen and global risk assets, we suspect that any major moves in global markets will force commensurate changes in FX markets.
In short, we expect a rapid weakening of Yen IN UPCOMING Trading Days,, fueled by the likely intervention from BOJ.
Strategy
So a BUY-UP of USD/JPY at 89.00 (Above Tenkan-Sen line and above 100 EMA) on H4 Chart
First Target: 91.26 (50% Fibo Retr. on Weekly Chart)
H4 CHART
H4 CHART
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