The Dollar Stalls near Resistance ahead of BOJ Meeting

Posted On 26 Oct 2015

USD/JPY is hovering near the 200-day moving average, stalling near resistance which capped a nine-day rally from 118.06. The BoJ will update its growth and inflation forecasts at its upcoming meeting, this Friday. There is some speculation that the central bank will announce additional stimulus, especially in the wake of the ECB’s and PBoC’s words and actions of last week, though BoJ’s governor, Kuroda, recently appeared to rule this out, while the minutes to the previous policy meeting revealed a fairly upbeat tone.

Further resistance on the currency pair is seen near the late August highs at 121.74. Support is seen near the 20-day moving average at 121.08. Additional support is seen near an upward sloping trend line at 119.

Momentum on the currency pair has turned positive as the MACD (moving average convergence divergence) index generated a buy signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The index moved from negative to positive territory confirming the buy signal.

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