The Bank of Japan met and eased their yield curve control on the 10 year effectively expanding their tolerance by a further 50 basis points to 1.0%. That news – and the other news this week – has the pair moving back toward a neutral level after up-and-down-volatility. The pair is trading near the 38.2% of the range since the end of June high at 140.224, AND the 100 and 200-hour MAs at 140.517 and 140.25 respectively (see blue and green lines on the chart below).
That area (between 140.22 and 140.517) will be the barometer for traders in the short term at least. Move above is more bullish. Stay below is more bearish.
On a break above, the 50% midpoint of the range since the end of June at 141.149 would be targeted. Move above that in the high price from last week at 141.953, and the high price from this week at 141.844 would be targeting along with the 61.8% retracement at 142.07.
On the downside, an old swing area between 139.75 and 139.99 if broken would increase the bearish bias and have traders looking more to the downside.
This article was written by Greg Michalowski at www.forexlive.com. Source