BOJ has published its Statement. This is the main points:
- Retains plan for 60 – 70 tln yen annual rise in monetary base
- To extend loan scheme aimed at encouraging banks to lend to growth sectors beyond March 2014 deadline (as expected) – extended by one year
- To double the size of funds provided under loan schemes targeting growth sectors, cheap lending to banks that boost lending (expanded to 7tln yen)
There is no key change in , but still has a small change: That is BOJ will expand loan program.
USDJPY react quickly : rally 50 pips to 102.70
The problem is whether this small change could provide enough catalyst to drive USDJPY higher or just be a temporary reaction.
Rising of Gold caused the sharp downtrend of USDollar , so USDJPY might be lower.
Japan economy is not good as economists expect : Japan GDP was lower than expect, and purchasing power of Japanese doesn’t rise up despite of tax hike coming in April .
Those problems could weaken Japanese Yen .
However, we should look at Japan industry production data, CPI , and Export to get a full picture of Japan economy and Yen. (Japan economy depends on manufacturing activities and export, and BOJ is pursuing 2% target).
Hence, I think it’s too soon to start the BUY order in the being time, but if you want to risk, you could BUY now.
USDJPY broke following resistance levels I draw on the chart:
- Upper line of channel.
- 102.40 .
- 38.2% Fib retracement.
- The neckline of reversed head and shoulder pattern.
There are two levels USDJPY would test if uptrend is maintained:
103.40 is a very important level because it’s the level of SMA50 and 23.6% Fib retracement. Thus, 103.40 is a key , the mark level. If price pierced this level, 104 would be the next target, but it is the future problem.
If traders open LONG position: the first target is 103 ( psychological level), second target is 103.40 key . Stop loss should be at 101.60
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