What now after BOJ bursts yen bears bubbles?
The first thing I've done is buy it at 108.05 with a stop just under 107.60.
USDJPY daily chart
Technically the reason is pretty obvious. Secondly, that's a hell of a move just over the BOJ sitting on their hands. It confirms that the market got far too expectant into this one and that's why the pair didn't fall too much on the FOMC. It looks like both Fed and BOJ longs have now jumped ship.
Strip out all the noise and what are we left with? Nothing. We're in the same boat we were before both meetings and now the price has adjusted back to the reality of that. Now we can trade normally again. Well, at least until the next round of meetings where the market will get all expectant again (June Fed hike anyone?)
Meanwhile we treat USDJPY the same we always do. We treat the levels the same way we always do.
USDJPY weekly chart
The 38.2 fib of the 2011 swing sits at 106.65. 105.45/50 and the 200 wma at 104.95 give us the big support levels below.
You know I like to watch for ranges in this pair and 108.00 - 112.00 is what we're in right now.
Following the big drop today, 108.50, 108.75/80, 109.00, 109.20, 109.40/50 are the likely candidates for resistance on a move back up. This move down has been swift and it can move up equally as quickly if given a reason to do so. 110 is likely to be the main resistance point if we see a bounce from here.
It's going to take a few more hours for the dust to settle but the reaction to these moves when the US opens could be important.