The USD/JPY pair fell for a significant part of the Tuesday session, only to pop higher and form a hammer. The pair is currently stuck in a down trending channel, but looks as if it is getting ready to make a serious attempt at breaking out of it. If it does – this pair should make a serious run at the 85 level.
The Bank of Japan is expected to increase its buyback program later this week, and this should continue to work against the value of the Yen overall. The Federal Reserve announcement later today will certainly have an effect on this pair, and if there is little mention or even no mention of easing in the statement – we could see this pair continue higher. None the less, we are buying dips until the 80 level is broken to the downside.
Written by FX Empire