The US Dollar (USD) fell broadly against the Japanese Yen (JPY) on Friday, dragging the price of USD/JPY to less than 101.30 following the release of the Bank of Japan (BoJ) monetary policy minutes. The sentiment remains bearish due to Lower Low and Lower High in the recent waves. The pair will remain directionless as far as the descending triangle formation is intact.
As of this writing, the pair is being traded near 101.32. A hurdle may be seen around 101.54, the 76.4% fib level ahead of 101.81, the trendline resistance as demonstrated in the following chart. A break and daily closing above the trendline resistance area could spur a renewed buying interest, validating fresh rallies above the 103.00 handle.
USD/JPY- Daily Chart
On the downside, the pair is expected to find a support near 100.82, the swing low of the recent correction wave as well as trendline support. A daily closing below the trendline support will open doors for a deeper correction below the 100.00 milestone.
BoJ Monetary Policy Minutes
The BoJ yesterday released minutes from the monetary policy meeting. The policymakers expressed satisfaction over the growth and inflation outlook and saw no need for further easing in the near future. Investors took the monetary policy minutes as hawkish that consequently spurred huge selling pressure in the price of USD/JPY.
CB Leading Indicator
The Conference Board (CB) is due to release the leading indicator report on Friday (today). According to the average forecast of different economists, the leading indicator remained steady at 0.5% in June as compared to the same reading in the month before. Generally speaking, higher leading indicator reading is considered positive for the economy, hence a better than expected actual outcome will be seen as bullish for USD/JPYY and vice versa.
Considering the overall technical and fundamental outlook, buying or selling the pair on a breakout through the daily triangle appears to be a good strategy in the long run.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT