USDJPY: the Week of the Pledges

FX:USDJPY   U.S. Dollar / Japanese Yen
Last week the BoJ confirmed its pledge to continue the massive stimulus program, targeting a 2% inflation rate. The FED had one day earlier dropped its pledge to keep borrowing costs near zero for a “considerable time”, though the final statement was somewhat muddled.

The theme of these diverging monetary policies will be the underlying driver of increased buying pressure on UJ, as the dollar's uptrend against the yen will resume. It gained 65 pips last Friday. Given these fundamentals, this push north will continue in my assessment, fighting through some resistance along the way and its path will no doubt be choppy, considering the lack of volume the coming week, so caution is advised.

On the technical side, on the daily chart price touched the 382 retracement of the latest swing high, before continuing its uptrend. On the hourly chart, UJ is currently trading in a bullish channel . Assuming it will continue its way until it approaches the top of this channel and taking relevant support and resistance levels into account, I will take profit at 120 (though I would not be surprised if it reaches even higher).

Since I am already long on UJ since Friday (and currently in profit), my advise to anyone looking for an entry point to join in this trade would be to consult your own trading plan and apply the rules of entry you normally use and are comfortable with. If the pair follows the script, there will be 55 more pips to be made.

UPDATE 1: It just touched the 120 handle.
UPDATE 2: It just broke above and closed above 120 handle.
You don´t need to be a weatherman to know which way the wind blows - B. Dylan
Update: it just touched the 120 handle.
JasperForex JasperForex
Update 2: It just broke above and closed above 120 handle.
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