- BoJ minutes released this Tuesday morning showed that majority of members agreed that there is a need to keep the policy easy as the 2% inflation target is still distant.
- Several members believe ‘information on QQE exit’ could cause market turbulence.
- Yen edged lower after BoJ minutes pushing USD/JPY higher to hit 111.33 levels.
- Recovery lacked traction, upside was seen capped below 5-DMA at 111.42, pair has slipped lower to currently trade at 111.10 levels.
- We see the major on track to test 110.95 (June 22 low) and then 109.25 (channel base).
- Consecutive spinning top and doji formations on daily candles last week, followed by close below 200-DMA and a 'Death Cross' formation support downside.
- Bearish invalidation only on decisive breakout above 200-DMA at 111.89.
Support levels - 110.95 (June 22 low), 110.23 (May 18 low), 110, 109.25 (channel base)
Resistance levels - 111.42 (5-DMA), 111.61 (50-DMA), 111.89 (200-DMA)
Call update: We had advised a short in our previous call (http://www.econotimes.com/FxWirePro-Possible-Death-Cross-on-USD-JPY-go-short-on-decisive-close-below-200-DMA-815003).
Recommendation: Bias lower. Stay short for targets.
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