Tuesday, January 21, 2014

EUR/JPY is waiting for signal from BOJ

It is all about the Bank of Japan Monetary Policy Statement, scheduled for release later today. A couple of words about why it is so important. The central bank’s super easy monetary policy helped to push the inflation in the country a bit higher. The target is not reached yet, but traders are anxious to know whether the Bank is ready to keep up its pace of monetary easing or slow down. This decision will determine the Yen direction for the rest of the year: more stimulus will send the currency down across the board. Watch out for the resistance of 142.00. Once it is broken, the bulls will drive the pair higher. To the downside the key support is 141.00, then 140.30.
The monetary policy was kept steady by unanimous vote, with the increase in monetary base retained at 60-70 trillion yen annual pace.
The core CPI is expected at 1.3% in FY 2014/15 – unchanged from October forecast (excluding effect of sales tax hike), while the core CPI is projected at 1.9% in FY 2015/16 – unchanged from October forecast (excluding effect of sales tax hike).
Board member Kuichi proposed a 2% inflation target as medium to long term goal, although it was refused by 8-1 votes against. On the growth prospects, Japan GDP is seen at 1.4% in FY 2014/15 vs. 1.5% projected in October, implying a downgrade of 0.1%

Below two charts technical analysis shows the waiting for break out of each resistance lines. On daily chart look navy resistance line we are waiting for that break out then go long!.
On H3 chart bullish divergence is going to break out the down channel if that channel breaks out then daily chart's resistance will definitely break out.


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