By: Mike Kulej
So far this week, the Japanese Yen, and all its crosses have been very volatile. They sold off significantly for 2 days following the emergency Bank of Japan policy meeting and recovered to some degree on Wednesday. This recovery ran into a stiff resistance though, and currently the JPY pairs are in a “no man’s land” of sorts – a holding pattern.
On this hourly chart, we can see how the GBP/JPY fell from 133.60 to 128.65 and the rebounded to 130.90 after running into a resistance at 100 SMA. The price retraced again and is at roughly a mid range of the last up swing, as if “deciding” on the next course of action. Given the extent of the recent moves, the GBP/JPY should break out either above 130.90 or below 128.65 reasonably soon, which could be a beginning of more sustained price moves, perhaps as large as 200+ pips in either direction in a rapid fashion.
With an important NFP report to be released in USA on Friday, chances are that the market will move before the weekend and establish a new longer-term trend.
