USD/JPY (a 4-hour chart)
The Bank of Japan monetary policy meeting results was the main event in the morning. We expect the moderate positive comments by Mr. Kuroda. The BoJ kept the monetary politic unchanged. Yesterday we saw the bearish sentiment prevalence in the world leading exchanges which also contributes to demand for the Japanese yen as a funding currency.
The price continues its weak downward movement. The pair fell below the support level of 120.40 but by the end of the trades the pair returned at this level.
The price is finding the first support at 119.20, the next one is 118.40. The price is finding the first resistance at 120.40, the next one is 121.60.
There is a confirmed and a weak buy signal. The price is above the Cloud and it is above the Chinkou Span. The Tenkan-sen and the Kijun-sen show a horizontal movement and form a “Dead Cross”. The upward movement will be until the price is above the Cloud.
The MACD indicator is in a neutral territory. The price is correcting.
We recommend going short with the first target – 119.20. When the price consolidates below the first target it may go to the level 118.40.