The Japanese Yen's value adjusted to the announcement with an initial increase of volatility that was followed by a decline. Note the initial spike of the USD/JPY up, as the rate was kept negative instead of being increased. The pair jumped from levels near 142.50 up to 143.70. Afterwards, as the press conference of the central bank started at 06:30 GMT, the rate decline due to the Yen strengthening. The Japanese currency strengthened due to market reaction to the comments that, if wages and prices increase in Japan, the BoJ could change its policy.
However, as the events ended, the rate started a clear surge to the resistance of the 144.30/145.00 range. By the end of the day, the range had held and caused a decline down to the 143.50/144.00 range. The rate kept finding support in 143.50 and resistance was provided by 144.00.
Economic Calendar
During the week before Christmas, there will be a couple of data releases that could impact the financial markets.
On Thursday, not the publication of the US Final GDP at 13:30 GMT. This is the final of the three quarterly US GDP releases. The United States release quarterly Gross Domestic Data over a span of a quarter. Data is published in three releases – Advance, Preliminary and Final. The most impact comes from the Advance GDP, and the least is from the upcoming Final GDP.
On Friday, the United States Bureau of Economic Analysis will publish the Core Personal Consumption Expenditure Price Index at 13:30 GMT. The change of the index shows how inflation impacts consumers. It is different from the CPI with the fact that it measures only goods that are consumed by individuals.
USD/JPY hourly chart analysis
A move below 143.50 is expected to look for support in the weekly simple pivot point at 143.23, the ascending 50-hour simple moving average and the 143.00 level. Further below, the combination of the 142.50 level and the 100-hour SMA might once again impact the rate.In the case of a USD surge against the Yen, the 144.30/145.00 range is set to act as resistance. A failure of the zone to keep the pair down would result in the USD/JPY testing the combination of the 145.50 level and the weekly R1 simple pivot point at 145.50.
Hourly Chart
USD/JPY daily chart's review
On the daily candle chart, the USD/JPY face a resistance line that has kept the rate down since the pair booked the high level on November 12. Most recently, the trend line held and supported the combination of the 200-day SAM and the 144.60/146.00 zone.Regarding the future, if the 140.00 mark does not act as support, note the support and resistance range at 137.30/139.40.
Daily chart
On Friday, traders were 61% short and orders were 61% to sell. The bearish sentiment had increased.
On Monday, traders were 57% short, but pending orders in the 100-pip range around the current rate were 70% to buy.
At the start of Wednesday's Asian trading hours, the sentiment was just 54% short. Traders appears to have closed their short positions, as the rate recovered. However, the closing of shorts could be over, as 52% of pending orders were to buy.