USD/JPY Technical Analysis October 26, 2011

USD/JPY fell on Tuesday, but bounced later in the session to form a hammer for the day. The Bank of Japan has been jawboning this pair quite a bit over the last couple of days, and many think an intervention is about to happen. The breaking of the top of the range from Tuesday would be a bullish case, although we think that the overall range will hold, keeping gains below the 78 level. (Unless of course the BoJ does get involved.) If we break lower, it dramatically will increase the odds that the BoJ intervenes, so we won’t sell this pair at this level.

Written by FX Empire