Bulls on EURJPY frightened as BoJ announces surprise tweak.
“Bank of Japan’s latest announcement continues to ripple through the market for second day.”
Japanese yen extended its gains for the second day after Bank of Japan announced a surprise move during its policy meeting. On Tuesday, Bank of Japan decided to tweak its yield curve by allowing long-term yields move 50 basis points either side of its 0% target. The target, which is wider than previous 25 basis point led to speculation of a possible path towards ending their current ultra-loose monetary policy.
Quick recap on EURJPY
The pair extended it descend from prior high levels as it loses footing near 142.
EURJPY Weekly Technical Analysis
From weekly perspective, the pair pulls back from high levels while MACD forms a bearish divergence signal.
EURJPY Daily Technical Analysis
The pair which recently closed below 200-MA line suggests further downside ahead while 136.61 would be the confirmatory level for such hypothesis.
Trading Idea
ORDER: SELL STOP
ENTRY: 138.10
STOP LOSS: 139.10
Target 1: 136.80
Target 2: 136.00
ZFX Analyst’s Comment
Overall, while the pair’s long-term sentiment is skewed towards the upside, it is expected to prolong short-term retracement for the time being.
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