The USD/JPY pair has been one that has been very interesting lately. During the Monday session, we initially saw the pair fall, only to be fit back up and form a somewhat hammer like candle. The Bank of Japan will have an announcement early Tuesday morning that will greatly affect this currency pair. The market has trying to anticipate what kind of massive quantitative easing the Bank of Japan is about to do, so there is a real chance that this is a “sell on the news” type of move. However, we do believe that this market does continue higher as it has broken out by just about anyone’s standards.
We see support at the 87.50 level, the 86.50 level, and numerous other minor places. The very first line of defense against the sellers will be at the 89 handle, and we believe that if this pair sells off after the announcement, this could be a nice bonding opportunity in a massive bull market.
Written by FX Empire