As the head of the Central Bank of Japan, H. Kuroda said during an ongoing speech in Parliament:
Foreign exchange rates are determined by a variety of factors;
In recent years, the yen, dollar, and euro have shown stability;
It is due to the course of monetary policy of the Bank of Japan, the Fed, and the ECB to achieve inflation within 2%;
It is difficult to explain the yen's rapid rise in 2011 by the monetary base gap of Japan and other economies alone;
The yen as a safe-haven currency tends to rise in moments of market turbulence; good thing that's not the case now;
The current rise in Treasury yields is a reflection of optimism about economic recovery, but the COVID-19 situation remains the biggest risk factor for the outlook;
The Central Bank is keeping a close eye on the forex situation as it affects the economy and prices.
Our Analysis:
Provided that the currency pair is traded above 108.90, follow the recommendations below:
- Time frame: 30 min
- Recommendation: long position
- Entry point: 109.08
- Take Profit 1: 109.35
- Take Profit 2: 109.45
Alternative scenario:
In case of breakdown of the level 108.90, follow the recommendations below:
- Time frame: 30 min
- Recommendation: short position
- Entry point: 108.90
- Take Profit 1: 108.75
- Take Profit 2: 108.60
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