27, March 2013

USD/JPY (a 4-hour chart)

USD/JPY (a 4-hour chart)

General overview

Haruhiko Kuroda, the head of the Bank of Japan held his first press conference a few days ago. He confirmed the intention to eliminate deflation and to achieve the inflation target of the Bank of Japan - 2% for two years. But Mr. Kuroda did not say anything how he is planning to do all this.

USD/JPY is being trading at the low range - about 93. The sell signal is confirmed. The price is below the Kijun-Sen and Tenkan-Sen, Kijun-Sen line directed to the side, the cloud has a neutral form. The pair is trading under a cloud. Yen created a new sell signal - "dead cross".

If the pair is fixed above Kijun-Sen, it can make another attempt to uptrend.

We recommend opening short orders.

Bollinger Bands lines are expanding and going down. The indicator confirms the downward movement.

MACD histogram left the zero area and started to go down.

Trading recommendations

The pair started the new trading week without any agitation, staying close to 94 level. The inflation rate - is an important test for the Japanese government and the Bank of Japan. The Parties undertake significant efforts to eliminate deflationary trends that have been observed in the Japanese economy. Index readings stay below zero in June 2012. This indicates a steady deflation in the business sector. Score for the upcoming release - 0.0%.

The correction is likely to continue, the pair may fall below 93.00.

Indicators suggest the downward movement.

If the pair consolidates under the cloud, the downward movement will continue. In this case, the first target will be the level 93.40. The pair will go it after fixing at 93.93.

Should the pair return to the northern movement, the first goal will become 96.00. After consolidation at it the price will move up to the level 96.55.