The pick of the day is USD/JPY as the pair showed little reaction to Mr. Takahide Kiuchi from Bank of Japan last night during the Asian session, and continued its boring horizontal dance below the Ichimoku cloud. What do you think will get the pair to become more passionate on the dance floor? Some might say, today’s FOMC economic projection at 2 pm EST. Some analysis think another $10bn will be taken off the QE purchases, while the unknown will be how Janet Yellen revises the forward. Most agree that there will be a move away from numeric guidance and onto qualitative assessment, but the analysts are still debating on how this will look. So, we expect a very choppy trading session over the announcement with everyone trying to understand what these economic celebrities actually mean by what they say – because they never just say it how it is.
I will be eyeing USD/JPY on the daily dance floor to see if it reaches and breaks below the 50% Fibo level. Because if it confirms the downward break, we could see more falls towards the 100 level. Now if the pair suddenly breaks above 102 and enters the Ichimoku cloud, our bearish outlook will alter and we could expect gains with 103 as target.
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