USD/JPY Technical Analysis October 18, 2011

USD/JPY continues to hover in its tight range as traders are taking advantage of extremely low volatility in the market. The Bank of Japan is willing to step into the market on the buy side if the Yen appreciates too quickly against the Dollar, and have been very public about it.

Because of this, the pair has had a range between 76 and 77.50, and we feel this should continue. The trade has been very simple: Buy close to 76, and sell close to 77.50. This can be repeated until it stops working, which of course we don’t know when that is. But the truth is that this pair has been very generous with its 50 pip scalps over the last several weeks.

Written by FX Empire