USD/JPY Technical Analysis October 4, 2011

In the world of Forex, the Japanese Yen is probably one of the “safest” currencies out there to buy. On Monday, we have seen another round of Yen buying as traders are selling off any type of risk they can. With the world slowing down economically, this pair will continue to be pressured to the downside. However, the Bank of Japan is willing to intervene if this pair falls too quickly, so selling isn’t going to be possible at this point either. Since the USD and JPY are both “safe haven” currencies, the pair should continue to be choppy, but stay in a tight range. Since the 76 handle seems to be the floor, and the BoJ is willing to sell Yen, we like scalping from the buy side at that level for roughly 40 – 50 pips. We can’t sell – you never know if the BoJ will pull the trigger, and you don’t want to be on the wrong side of that trade!

Written by FX Empire