BOJ's New Governor Seems Up To The Task

BOJ's New Governor Seems Up To The Task

2023-08-02 • Actualizada

Kazuo Ueda, the Bank of Japan's Governor, effectively adjusted the yield curve control policy, but caution is still needed as inflation remains a challenge. The BoJ expects inflation to hit its target next year, but external inflationary pressures may abate. The government needs clearer fiscal plans supporting worker productivity and innovation to achieve sustained wage growth and meet the 2% inflation target. Fiscal and monetary policy coordination is vital for economic management in Japan, and the Bank of Japan can't achieve this goal alone. A concerted effort between the central bank and the government is necessary for sustainable inflation and economic growth.

USDJPY - D1 Timeframe

USDJPYDaily-2907reusult.png

USDJPY made a sharp bounce off the trendline support last week. Now it is heading for the rally-base-drop supply zone at the top of the previous price high. In this case, I aim to pursue the price action all the way to the supply zone and then seek selling opportunities from that area.

Analyst’s Expectations: 

Direction: Bullish

Target: 143.570

Invalidation: 141.125

AUDJPY - D1 Timeframe

 AUDJPYDaily-2907.png

AUDJPY has been rejected from the trendline resistance in a move currently stalling around the 50 and 100-period moving averages. Although the market is yet to present a proper break of structure, it is my opinion. However, that price would nonetheless reach for the trendline support since it is closer to the 200-day moving average.

Analyst’s Expectations: 

Direction: Bearish

Target: 88.843

Invalidation: 97.715

GBPJPY - D1 Timeframe

 GBPJPYDaily-2907.png

GBPJPY recently broke out of a consolidation channel and is completing a retest of the same support trendline it had initially broken below. In this case, I expect a reaction from the supply zone, confirming my bearish sentiment. The rejection from that supply zone is the final piece of the puzzle I would be waiting for.

Analyst’s Expectations: 

Direction: Bearish

Target: 174.671

Invalidation: 184.168

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

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