Hey folks, it’s a wrap to yet another month in the 2023 calendar, and I’m guessing you know what that means - time for another episode in the “What To Trade” series. For December, I will be mapping out trade more cautiously as the market volatility often drops
How Will BOJ Statement Affect the Yen?
2023-03-07 • Updated
The Bank of Japan is expected to release a statement regarding its monetary policy for the second time this year. This statement, due on the 10th of March, usually has a very high impact on the outlook of the Japanese Yen as it ties in closely with the short-term interest rates and overall strength of the currency.
The Daily timeframe chart of the USDJPY already looks like the onset of a downward move. We can see the 100- and 200-period moving averages have successfully rejected prices from going higher. Also, looking at the fact that the rejection occurred from the supply zone overlapping with the 88% Fibonacci retracement level, it is quite safe to sustain a bearish sentiment.
Here we have a large wedge constricting price movement on the daily timeframe of GBPJPY. Price has also recently bounced off the supply zone above the trendline resistance of the wedge. Based on this, the position of the moving averages, and the 76% of the Fibonacci retracement zone, it is safe to expect a further price decline.
CADJPY is reacting within the highlighted supply zone, and we also have a bearish alignment from the moving averages. As a result of these confluences, I have a bearish sentiment. However, it is less confident than I would like.
We've been pursuing this particular setup for a few days. It is noticeable that the price here is still trading under the supply zone, with slight rejections already taking place. The resistance trendline and the 76% Fibonacci retracement level add additional confluences. The 50-period moving average trading below the 100-period moving average also confirms a bearish sentiment.
Target: 142.7; and 141
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