The US dollar has moved above the 113.00 resistance against the Japanese yen currency after buyers performed a key technical breakout above the 112.87 level. What can traders expect next? Gain insight into the following USDJPY technical analysis.
31 October, OctaFX – The Japanese yen continued weakening against the USD after the Bank of Japan made its monetary policy decision.
As expected, the bank left rates unchanged at minus 0.10% and indicated that it will tweak the bond buying process but it won’t rush changes. The new decision was made to ensure that the government debt market reflected the fundamentals.
The reason for the yen weakness was that the bank did not give any forward guidance on the future of interest rates. In addition, the bank trimmed the inflation target for 2019 to 0.9% from the July forecast of 1.1%.
USDJPY Technical Analysis
The USDJPY pair moved higher, continuing a strong trend started on Wednesday last week. The pair reached an intraday high of 113.32. This was the highest it has been since October 11. The upward trend is gaining momentum as shown by the momentum indicator below.
The Average Directional Index (ADX) which measures the strength of the trend is currently at 61 while the price is along the upper band of the Bollinger Bands. This is an indication that the pair could continue moving up in the new month.
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