On Wednesday USD/JPY demonstrates multidirectional dynamics, not moving away from the key level of 145.00, which most likely plays a decisive role for the Bank of Japan on the issue of currency interventions.
Last week the Japanese authorities intervened in the situation with the yen, trying to stop the collapse of the national currency. That lead to a rapid decline in the pair from 145.00 to 140.00. However the market reaction was short-lived because of the strong divergence between the rates of monetary policy of the Bank of Japan and the Fed. The Japanese regulator remains perhaps the only central bank among advanced economies with a soft monetary policy. The BoJ keeps interest rates in negative territory (-0.1%) and maintains its quantitative easing program, keeping debt bond yields near zero.
In contrast, the Fed has raised rates at every meeting and says it will continue to aggressively tighten monetary policy. The regulator is expected to raise the rate by 75 basis points for the fourth consecutive time at its next meeting on November 2. Expectations are raising U.S. debt yields, which in turn will strengthen the dollar.
Fundamental background, chart patterns and candlestick patterns suggest a continuation of the uptrend. However, the pair is around the 145.00 level, and there is a chance that the Bank of Japan will not let the asset move higher.
Counting on a new currency intervention, we consider the installation of a new order to sell USD/JPY
Sell-limit 145/50 take-profit 140.00 stop-loss 146.50
More about USD/JPY trading
If you are interested in USD/JPY analytics, we recommend you to visit the analytics page, where you can find the latest analytics on Forex from top traders from all over the world. These analytics will be useful both for beginners and professional traders. The Forex signals service makes it much easier for beginners to make their first steps in trading on the financial markets. The latest USD/JPY forecasts and signals contain support and resistance levels, as well as stop-loss levels.