FX ticker

Monday 31 October 2011

MarktCharts Bank of Japan warning timely



As I warned only a couple of days ago the recent low for the USD/JPY was a critical juncture. A close below last week's low would have triggered a wave of selling. The Bank of Japan obviously realised this and as warned the intra-day attempt to move lower was met by BOJ intervention and a massive move up. These interventions are nothing new though and historically have only been temporary before the downtrend resumes. I'd expect the dollar to retrace over the remainder of the week to test the 76-77 level and the BOJ's resolve. There is nothing yet to suggest this is the final botom but attention should be given to the downtrend line on a weekly chart should this be breached on the upside.

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