28 Apr 2016
EUR/JPY: 121.70 is key downside target - FXStreet
Valeria Bednarik, chief analyst at FXStreet noted that the EUR/JPY pair plummeted nearly 400 pips after the Bank of Japan decided to leave its economic policy unchanged.
Key Quotes:
"Despite earlier on the week there were some rumors making the rounds that the BOJ was not going to act this time, the market was expecting the Central Bank to react firmly to recent JPY's strength, having already priced in last week some kind of extension in the ongoing monetary stimulus. Demand for the JPY skyrocketed after the announcement, and the currency spent most of the last two sessions consolidating its newly acquired gains."
"Short term, the 1 hour chart shows that the technical indicators have corrected extreme oversold readings before turning back south, whilst the price remains near the daily low set at 122.52, supporting some additional declines for the upcoming hours.
In the 4 hours chart, the technical indicators have also turned south after a limited upward corrective movement from extreme levels, in line with the shorter term outlook and supporting a retest of April low of 121.70."
Key Quotes:
"Despite earlier on the week there were some rumors making the rounds that the BOJ was not going to act this time, the market was expecting the Central Bank to react firmly to recent JPY's strength, having already priced in last week some kind of extension in the ongoing monetary stimulus. Demand for the JPY skyrocketed after the announcement, and the currency spent most of the last two sessions consolidating its newly acquired gains."
"Short term, the 1 hour chart shows that the technical indicators have corrected extreme oversold readings before turning back south, whilst the price remains near the daily low set at 122.52, supporting some additional declines for the upcoming hours.
In the 4 hours chart, the technical indicators have also turned south after a limited upward corrective movement from extreme levels, in line with the shorter term outlook and supporting a retest of April low of 121.70."