Following Bank of Japan’s Governor Kuroda announcement, Japan’s economy continues to with inflation hovering around 0%. BOJ will maintain QE with yield curve control in order to bring inflation back to the 2% target.
Nevertheless, U.S. Dollar pairs continued to remain upbeat re-inforcing expectations for a December rate hike. The Dollar Index reached its highest point since March and is expected to continue rallying with the current market sentiment.
The next key level to watch out for on the Dollar Index is at the 98.45 mark. Although I do not like to do technical setups on indices that track a list of underlying movements, I do consider this as more room for the Dollar to rally.
As of market open, the USDJPY is looking to break above the 104~ price level after consolidating for the past three sessions. Switching over the a lower time frame, I consider going long above the 104.40~ level.
The 104.35~ to 104.40~ price zone marks a series of offers putting downward pressure at this zone. If price is able to surpass this zone without any downward pressure, I would look to go long on this pair.
Recall, USDCAD broke out of our daily price level marked at 1.323~. My trade plan was if that price level sustained, we could expect a further rally. However, price reached the 1.33~ high, but failed to sustain twice. I currently remain bearish as bidding seems to have died off with no further higher fills and will be preparing for a short entry.