- The previous 15-minute candle of the USD/JPY closed at 113.85, confirming a downside break of the bear flag - a bearish continuation pattern - meaning the sell-off from the previous day's high of 114.55 has resumed and the pair could drop to 113.00 (target as per the measured move method).
- The bearish breakdown has happened after the news hit the wires that the Bank of Japan has kept the size of the ultra-long bond purchases unchanged from the previous operations, signaling growing tolerance for higher yields.
- The sell-off, as called by the bear flag breakdown, could gather pace if the EM currencies continue to slide, worsening the risk aversion in the global equity markets.
Spot Rate: 113.88
Daily High: 114.10
Daily Low: 113.84
R1: 114.06 (Oct. 1 high)
R2: 114.55 (previous day's high)
R3: 114.74 (November 2017 high)
S1: 113.53 (10-day exponential moving average)
S2: 113.00 (psychological support)
S3: 112.73 (38.2% Fib R of 109.77/114.55)
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