USDJPY Tests Bottom of Symmetrical Triangle After the BOJ’s Shortened Rate Decision

[vc_row][vc_column][vc_column_text]USDJPY is marginally lower in today’s Asian session after the Bank of Japan (BOJ) made its monetary policy decision. As of this writing, the currency pair is trading around 107.39 which is 18 pips below its opening price for the day.

The BOJ shortened its usual 2-day monetary policy meeting to just one day and decided on keeping rates unchanged at -0.10%. However, the central bank announced more easing measures to help support the economy as it deals with the coronavirus pandemic. It pledged to increase its purchases of commercial paper and corporate bonds, with more relaxed rules for buying. The BOJ also pledged to buy unlimited amounts of JGBs (Japanese Government Bonds). Lastly, the central bank also expanded the types of collateral it will accept for loans to help more companies get access to liquidity.

While further easing is traditionally bearish for a currency, USDJPY is trading lower following the announcement because the BOJ did not present any surprising measures. With this, the FOMC meeting on Wednesday could likely be another market-moving event for USDJPY as investors await the Fed’s next move.[/vc_column_text][vc_column_text css=”.vc_custom_1585658788094{background-color: #f9f9f9 !important;}”]

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USDJPY Outlook

On the 1-hour time frame, it can be seen that USDJPY is testing the bottom of a symmetrical triangle. This is widely considered as a neutral indicator until the market is able to successfully breakout of the consolidation. With that said, keep tabs on Friday’s lows at 107.36. A close below this price could mean that USDJPY is on its way lower to the lows of April 15 around the 107.00 handle. On the other hand, reversal candlesticks around this price could mean that there are enough buyers left in the market to push USDJPY to the top of the triangle at 107.78. A bullish close above this price could mean that the next resistance level could be at the highs of April 23 at 108.03.[/vc_column_text][vc_column_text css=”.vc_custom_1565176883833{background-color: #f9f9f9 !important;}”]

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