Tuesday October 5, 2010 - 14:12:58 GMT
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Forex Hound - www.forexhound.com
BoJ Surprise Shakes Up Forex Markets
The Dollar/Yen declined in Asian trading overnight after
getting an initial boost from what the Bank of Japan describes as a
â€ścomprehensive monetary easingâ€ť. Last
night the BoJ unexpectedly cut its benchmark interest-rate range to between
zero and 0.1% from 0.1%, and pledged to maintain its policy until prices
stabilize. It also revealed it would implement a new asset-buying fund.
Technically, the USD JPY surged overnight, creating a new
main bottom at 83.16, before succumbing to selling pressure. The new main range
is 85.93 to 83.16, setting up a possible upside target at the 50% level at
The sell-off began after the initial rally fell short of the
50% retracement level while the subsequent break is threatening to take out the
swing bottom at 83.16 to reaffirm the main trend.
An uptrending Gann angle at 83.32 has stopped the
Dollar/Yenâ€™s slide the past two days. Bullish traders will try to establish
support on this angle, but if this fails, look out below.
The sharp break from last nightâ€™s high could be indicating
that traders feel the BoJ is not going to intervene over the near-term. This
may give traders the confidence to continue to sell the USD/JPY.
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