USD/JPY Daily Outlook- Oct. 28, 2013

Christopher Lewis

The USD/JPY pair fell during the bulk of the session on Friday, but as you can see bounced high enough off of the 97 level in order to form a hammer. This is the short-term trading opportunity as far as I can tell, if we get a move above the top of this hammer, we think that this market will continue to go higher, possibly to the 98 handle. That being the case, the markets should continue to consolidate in this general vicinity, and as a result I will not be hanging onto any long position for any real length of time.

That being said, if we get a break of that hammer top, I am willing to aim for 75 pips at best. You have to keep in mind that this is a market that is been strangled by two central banks it simply refused to do anything but loosen monetary policy at this point. In short, these are two currencies that won't do very well overall. Right now you have the real battle lightweights, with nobody in particular winning.

Bank of Japan

The Bank of Japan will continue to counter the Federal Reserve and any of the moves that it does, as they do not want a strengthening Yen. After all, the Japanese economy desperately needs export power, and if their goods are too strong, they will not get it. That has a major detrimental a fact to the Japanese economy, and as a result that will always have the BoJ looking to ease monetary policy in order to devalue the currency.

Having said all that, I do believe that we managed to break above the 98.50 level, we could have a stronger move higher. But it is not until there that I'd be willing to place a position on that was longer than a day or two possibly. Shorting is not possible at this point, were starting to see quite a bit of support below. With that being said, I believe this is a short-term traders market.

USDJPY Daily 102813

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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