BoJ move Shifts Investor Sentiment Back to Dollar

The U.S. Dollar is strengthening this morningafter the Bank of Japan decided to invoke an emergency easing plan.

The U.S. Dollar is strengthening this morning after the Bankof Japan decided to invoke an emergency easing plan. The BoJ avoided anintervention but instead decided to provide liquidity in an attempt to weakenits currency. The plan includes expanding its current 20 trillion Yenquantitative easing program to six-months from its current three-month timeframe. It also increased the amount of funds available by 10 trillion Yen.

Forex traders reacted to this plan by purchasing the Dollaragainst most major currencies in what can best be described as aflight-to-safety rally.

Technically, after an attempt to breakout to the upsidethrough the last swing top at 85.91, the USD JPY is now trading sharply lower.The last main bottom at 83.59 seems safe at this time, but could be challengedlater in the day if 84.75 cannot hold today’s break.