It's me Max again, hope you guys are trading well.
Check out the my chart drawn for USDJPY .
Fundamental reason:
Big shift in USD weakness to strength overnight. Shown in EUR, GBP, AUD and NZD. Especially USDCHF have continued higher after ECB announcement.
Big data today first is BOJ Monetary policy, it's been widely expected to leave rate on hold. However we should expect so see BOJ will try to do everything they could to weaken the JPY again given the recent strength in JPY. Which resulted in hindering their inflation target of 2%. (Which i think it's still nowhere near this.
'Second is NFP US coming up, should support USD strength given the job report on Wed was pretty good.
Technical Reason:
From my chart drawn, it showed the price first breakout the first red downward trendline, at that time people are scared of news on "Cohn'", and everyone was looking to fall below 105, which didn't happen unfortunately. Guess is this is the example of contrary thinking needed to be in.
But for me still like to wait until the shift in trend confirmed by the market, which is what happens now. From yesterday's movement price tried to break below the red downward trenline but failed which became support together with 22MA.
Now the total shift in momentum with price clearly stay above the long term MA and short MA cross over to the top have confirmed the upward momentum.
All these have happened during the time of big USD strength last night. Why JPY was lagging behind? It could be the need to wait for BOJ announcement today. If Dovish BOJ comes in today, we could see price quickly goes above 106.5 (yesterday's high) towards previous resistance 107.2 and 107.7. This also depends on the US NFP tonight.
If you guys like my post, please follow and leave a feedback. Good luck trading and be safe! :)
Hope you guys have trailed the stop loss to lock in some gains, cheers.