By: Mike Kulej
In spite of the all the coverage surrounding the Japanese Yen, the USD-JPY has become one of the least attractive currency pairs to trade. In spite of all the efforts of the Bank of Japan, like the intervention and expansion of easing policies, it refuses to move higher.
In fact, the USD-JPY is hardly moving at all.
During the last three weeks, the total trading range has been less than 200 pips, between 80.23 and 81.98, floating just above the all time low of 79.75 established in 1995. This market is clearly waiting for a catalyst, a major one, to push it either way and decide the next big price swing. It could come in a form of an important international financial agreement, an intervention by a central bank or a geopolitical event.
From a technical point of view, the USD-JPY is in a consolidation following a downtrend. Indicators, like the RSI or the Stochastic, are either flat or showing neutral reading in the middle of their respective scales.
Combined with tight daily price ranges, they do not provide any clues about the next move. This current state of affairs can easily last for few more weeks, which makes the USD-JPY best left alone, until a breakout out of the trading range takes place.
