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Technical analysis: USD/JPY (10.04.12)

Although the decision of the Bank of Japan to maintain its key interest rate unchanged at 0.10% was widely expected, traders were caught off guard by the lack of stimulus expansion that sent the USG/JPY plummeting below 82.00.

The market continues to correct from the recent 2012 highs established at 84.12 several days ago, trading in a tight downtrend channel since 15 March. At 81.12 this morning there is still risk for additional setbacks into the 79.00-80.00 area, before the market considers a bullish resumption. With a negative line capping RSI and the MACD signal line set to cross below the zero line on the daily chart the bias in the market remains bearish.

The picture continues to look bearish on the four-hour chart with the bearish alignment of the 20 EMA below the 50 EMA still in place since 28 February and the RSI hovering below 50 in the past week.

Following the disappointing US NFP data on Friday and the speculation for further stimulus from across the Atlantic, the US dollar could log further declines, which also favours short positions in USD/JPY with a key target the psychologically important level at 80.00. In the opposite case, sustained trading over 82.50 would suggest that the corrective move is over and that the bias could turn to the upside again.

Click to expand image

Click to expand image

Dafni Serdari
Market Analyst

Published: 10 April 2012

You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is not investment advice. The information provided is believed to be accurate at the date the information is produced.

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