After keeping the market anxious for more than a week of intervention speculations around 155.00, market players initially probed past the said price before clearly pushing through. Following Friday’s BoJ Monetary Policy Meeting, Governor Kazuo Ueda made clear that easy financial conditions were here to stay in Japan with March’s rate hike a symbolic one-off. Intervention, or lack here-off was also made clear by stating that monetary policy is not geared towards directly controlling FX rates.
Resistance
- 176.65 – Ascending Triangle Target
- 160.00 – Psychological
- 158.44 – Friday High
Support
- 157.56 – Intraday Consolidation Floor
- 156.83 – Intraday Consolidation Resistance
- 155.75 – Intraday Consolidation Resistance
Given the BoJ’s policy stance we view USDJPY as a long term buy, with defensive hedges closely beneath the entry. Note that we are seeing regions last seen before online trading became a thing which makes most of our resistances theoretical values based on charting methods, not the intraday traders price action. With the policy stance any drop in the pair is likely to be limited to stop hunting or lack of liquidity, meanwhile longs benefit not just from the potential upside but from the daily swaps as can be seen below.
In theory we should be looking at A’ from our chart as the ascending triangle break out’s long term objective.
