Time Table
USD / JPY was already strongly bullish this morning, following the release of the FOMC minutes which led USD higher. However, the bulls were capped below 100.50 for most of the Asian morning due to traders taking profit ahead of BOJ rate decision. As a side note, this decision is strange that the downside risk for the BOJ event is low - BOJ is not expected to announce a new stimulus this time the bet is short on December rate decision, and it is almost impossible that BOJ hawkish statements. Therefore, the upside risks are higher than any surprise status quo would have sent USD / JPY much higher, making the profit announcement soon take a little pre particular.
However, in doing so, traders USD / JPY are cautious, and that is actually good news because it would mean that the announcement of the subsequent rally post BOJ would have less chance of a catchy withdrawal . This is true even if the stochastic readings are very overbought, as 100.50 escape inspired a strong upward technical pressure above the hope that BOJ will reveal something big in December coupled with US Fed potentially narrowing early 2014, if not in December.
Daily chart
weekly picture is less optimistic, however. Price may still face strong resistance all the way to 101.5, particularly as stochastic readings are highly overbought. Prizes must clear in order to increase the bullish conviction to high of 103.7 in 2013.
However, from another perspective, the bulls should be happy that the upward road here is not easy, because only real strong (read: non-speculative) bullish conviction / pulse will be able to break this resistance band, which means that the fundamental reason for the rally must be clear and obvious - for example, BOJ announced a prodigious stimulus plan in December. With this break, the chances of high followed by the bullish bias will be high, and the bulls will be rewarded for their patience.
Things are not so simple for many bears. If BOJ disappoints, prices will certainly dive, but the decline following will depend on whether the market is still full of hope for more stimulus in the future. Hence traders have to wait and discern the sense of price action, and automatically assuming that the price will hit at the rising trend line below may not be accurate
links :.
Gold Technicals - Stable Here 1250 Post FOMC Minutes
US S & P 500 - Heat cone Feeling stocks but L / T Momentum bullish Intact
US10Y - Staying above 126.5 for now mintues post FOMC
This article is only for general information purposes. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
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