USDJPY Rebounds Despite BoJ Change. Watch for Retracement Towards 149.40 Before Continuing Bullish

USDJPY Rebounds Despite BoJ Change. Watch for Retracement Towards 149.40 Before Continuing Bullish

2024-03-20 • Updated

  • Bearish Scenario: Sales below 150.30 with TP1: 150.00 and TP2: 149.39 with S.L. above 150.80 or at least 1% of account capital*.
  • Bullish scenario after retracement: Intraday buys above 149.40 with TP: 150.00, TP2: 151.00, and TP3: 151.50, with S.L. below 148.90 or at least 1% of account capital*. Apply trailing stop.

Fundamental Environment

The Bank of Japan (BOJ) has made a pivotal decision to raise interest rates for the first time since 2007, marking the end of the world's last negative rates regime. This move signifies a significant shift in Japan's monetary strategy, which has been in place since 2016, aimed at combating deflation and stimulating economic growth. The BOJ has increased its short-term interest rates from -0.1% to around 0% to 0.1%, reflecting potential wage strengthening this year.

The yen may continue to experience high volatility amidst the Federal Reserve's monetary policy meeting on Wednesday, March 20th.

Scenario from H2 chart:

The pair renews its bullish sequence from last week, leaving the last significant support at the level of 148.91. With the price weakened by 1.13% since the week's opening against the USD, the pair reached the selling zone at 150.41 and overbought zone on the RSI, offering a corrective scenario below 150.30 with a target in the broken zone around 149.40, from where to acquire the necessary liquidity to rebound above the February resistance at 150.88 towards 151.43 and once again challenge the highs of 2022 and 2023 at 151.90.

On the other hand, the strong breakouts of the buying zones between 149.39 and 149.12 will challenge the last significant support at 148.91, whose confirmed breakout with a second low will reverse the current ascent with more sales towards 148.00.

These scenarios can occur within one week, especially considering the expected volatility this week.

*Uncovered POC: POC = Point of Control: It is the level or zone where the highest volume concentration occurred. If there was previously a bearish movement from it, it is considered a selling zone and forms a resistance zone. On the contrary, if there was previously a bullish impulse, it is considered a buying zone, usually located at lows, forming support zones.


**Consider this risk management suggestion

**It is esencial that risk management be based on capital and traded volume. For this, a maximum risk of 1% of capital is recommended. It is suggested to use risk management indicators like the Easy Order.



This document is not a recommendation to buy or sell financial products and should not be considered as a solicitation or offer to engage in transactions. This document is economic research by the author and is not intended to provide investment advice or solicit securities transactions or other types of investment in FBS. While all investments involve some degree of risk, the risk of loss in trading forex and other leveraged assets can be substantial. Therefore, if you are considering trading in this market, you should be aware of the risks associated with this product to make informed decisions before investing. The material presented here should not be interpreted as advice or trading strategy. All prices mentioned in this report are for informational purposes only.



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