BoJ's dovish move to introduce negative rates was in response to poor inflation in Japan and a strengthening JPY, which the later, has the potential to cause a negative impact on its economy and its exports. Nonetheless, in the short term, the JPY should weaken on this news.
The pair has made a momentum break above L4 support -119.30 and EMA89 has closed above suggesting a valid breakout. The price may either a) continue with the trend b) retrace to POC zone (DPP, L3, 50.0). Watch the chart carefully- because we have a strong momentum break on USDJPY we might see a shallow retracement to 23.6 (blue coloured -121.00) and the price might continue towards H3 resistance at 121.95.
If the price respects a zig-zaggish standard retracement pattern, it could drop towards POC and reject from there. The zone is 120.15-30 and as long as the price holds above 119.30 the targets are 121.95 and 122.80 if we get hourly or 4h close above 121.95.
The analysis and the article presents Nenad's opinion. Remember, financial trading is highly speculative & may lead to the loss of your funds. Proper risk management is the Holy Grail of trading.
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