10, April 2013

USD/JPY (a 4-hour chart)

USD/JPY (a 4-hour chart)

General overview

The new head of the Bank of Japan Haruhiko Kuroda introduced a new policy on April 4. Investors expected the bank to announce an increase in asset purchase program, but the plan to double the amount of asset purchases in two years surprised market participants, prompting further opening up of short positions.

The Japanese yen fell to its lowest level in nearly four years. There are no signs of weakening the yen strong downtrend, which was formed after the last meeting of the Central Bank. Investors began to actively sell the yen after the Bank announced last week that it would send trillion yen to a weakened economy to accelerate economic growth and to keep interest rates low.

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

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

MACD histogram started to reduce its volume, the signal line left the indicator body. Everything confirms a correction.

Trading recommendations

After the meeting of the Bank of Japan yen predictably began to grow, reaching almost 100 yen per dollar.
However, investors have little confidence in the long-term growth without a good economic support.

100 is major psychological level and the couple is not the strength to overcome it at the moment.
We expect the pair to fall to the levels 98.00 - 99.60.