09, April 2013

USD/JPY (a 4-hour chart)

USD/JPY (a 4-hour chart)

General overview

The Bank of Japan has set the tone of the market. On Monday morning, the Japanese yen rose sharply to fresh lows against the major currencies. It was previously stated the intention of the Bank to buy long-dated bonds to beat deflation.

The U.S. dollar grew at the very beginning of Asian session. It has reached 98.78 yen, and this is the highest level since June 2009. The euro rose to 128.32 yen, which is the highest level since January 2010.

The central bank surprised the dealers with intention to buy 1.2 trillion yen and government bonds with a maturity of five years.

Japanese investors are planning to use the part of the cash flow to purchase more lucrative assets abroad. In this case, the yen will get additional strength.

Yen is above the Kijun-Sen and Tenkan-Sen, Kijun-Sen line is directed upward, the cloud is growing.

Bollinger midline followed the price and is directed upward. The indicator lines are directed to different directions, indicating the uncertainty of the market.

Histogram MACD gives a buy signal, the indicator is going upwards.

Trading recommendations

In this situation, it is best to open buy orders, but only if the price breaks the level 97.20. In this case the price can grow to

However, a downward correction is still possible to the level 96.30. We expect a correction to the levels 95.95, 95.55 and 95.00 in a longer term.