BOJ Raises Interest Rates - Monthly Outlook for USDJPYTaking a look at the monthly timeframe, if you look back in the past, whenever we had a strong bearish engulfing candle, there was usually a second bearish candle afterwards.
I believe there is a great chance that this pair will break below the green ascending trendline and eventually reach 130.
Some key comments made last night from the BoJ's Governor Ueda:
* If possible a US rate cut happens gradually, it could lead to strong a Yen.
* The weak Yen was not necessarily the biggest reason for the rate hike this time.
* Hard to tell when the next rate hike may be
* Does not have 0.50% policy rate in mind as a ceiling
* I don't believe the latest rate hike will trigger a strong brake on the economy.
Later this afternoon we will get the latest US monetary policy decision.
Furthermore, as we all know, the US equity market tends to have an inverted correlation with the Yen. This means if US stocks continue to sell off heading into the elections, we might see some additional strength with the Yen and thus push this pair even lower.
