The USDJPY experienced an aggressive appreciation in the early hours of Friday morning surging almost 300 pips following the Bank of Japan’s unexpected move in turning official interest rates from 0 to -0.1% in an attempt to keeping the economy from entering stagnation. This abrupt action shows the BoJ’s determination in battling global woes which have threatened to send the country back into a state of deflation. With JPY weakness taking center stage in the global currency markets the USDJPY may be expected to appreciate further in the medium term. From a technical standpoint, the pair is heavily bullish as prices have cut through both the daily 20 and 50 Simple moving averages. The MACD is in the process of crossing to the upside and a solid daily close above 120.50 may encourage buyers to send prices towards 123.50.
The EURJPY was previously under pressure from the growing expectations of further stimulus measures from the ECB in March, but this was quickly erased following the surprise rate cut by the BoJ which weakened the JPY immensely. While the signals may be mixed on the EURJPY, prices are still trading within the daily bearish channel with 132.00 acting as a critical point. The lagging indicators such as the moving averages suggests that bulls are in control while the MACD is also in the process of crossing to the upside. A daily close back below 132.00 may offer bears a chance to send prices towards 130.00, on the other hand if the EURJPY close above 132.00 then the next resistance will be based at 134.00.
The GBPCHF is quite bearish on the daily timeframe and the risk-off trading environment has left the Sterling under a lot of pressure. Prices are trading marginally above the daily 20 SMA while the MACD has also crossed to the downside. If bears can keep the pair below the 1.4600 resistance then a further decline towards 1.4350 may be expected. A solid daily close back above 1.4600 may encourage an appreciation towards 1.4800.
The GBPUSD is heavily bearish on the daily timeframe and a breakdown below 1.4250 should invite bearish investors to send price towards 1.4150 and potentially lower. Prices are trading below the daily 20 SMA and the MACD has crossed to the downside. If bears fail to keep control and prices close back above 1.4400 then this bearish daily outlook becomes invalidated.
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