The Japanese yen has managed to hold its loss in front of 16 counterparties during the last weeks mainly because of the risk aversion installed worldwide, triggered by problems erupted in Cyprus which threatened to Europe’s economy. Another factor was that BOJ did not make public anything regarding the new monetary policy that should get Japan’s inflation to 2 percent in the next 2 years.
The firs monetary meeting it is scheduled for next Thursday. The market is expecting at least a 15 trillion yen of monthly stimulus and also other measures to be taken which eventually will depreciate the currency and beat deflation. Let us hope that Kuroda would try not to disappoint and keep up with the expectations.
From the technical point of view, NZDJPY, looks pretty well. An Inverted Head and Shoulders was formed wright under 80.00 key level. This pattern is not a reversal one, because was formed on an uptrend. If its baseline will be broken and the price will close over it, than we can expect a rally to 85.00 where the target of the pattern is set.
Confirmation Level: 80.15
Take Profit: 84.99
Stop Loss: 77.79