The Dollar/Yen declined in Asian tradingovernight after getting an initial boost from what the Bank of Japan describesas a “comprehensive monetary easing”.
The Dollar/Yen declined in Asian trading overnight aftergetting an initial boost from what the Bank of Japan describes as a“comprehensive monetary easing”. Lastnight the BoJ unexpectedly cut its benchmark interest-rate range to betweenzero and 0.1% from 0.1%, and pledged to maintain its policy until pricesstabilize. It also revealed it would implement a new asset-buying fund.
Technically, the USD JPY surged overnight, creating a newmain bottom at 83.16, before succumbing to selling pressure. The new main rangeis 85.93 to 83.16, setting up a possible upside target at the 50% level at84.55.
The sell-off began after the initial rally fell short of the50% retracement level while the subsequent break is threatening to take out theswing bottom at 83.16 to reaffirm the main trend.
An uptrending Gann angle at 83.32 has stopped theDollar/Yen’s slide the past two days. Bullish traders will try to establishsupport on this angle, but if this fails, look out below.
The sharp break from last night’s high could be indicatingthat traders feel the BoJ is not going to intervene over the near-term. Thismay give traders the confidence to continue to sell the USD/JPY.