The Bank of Japan may well start another series of currency interventions, which hinders the demand for the Japanese Yen. The probability of such a scenario is increasing as the FRS is more likely to start another round of quantitative easing.
Investors anticipate a currency intervention in case USDJPY falls below 78.50. the expectations are being heated by the rumors that the Japanese authorities are placing hidden orders below the level.
Stocks and commodities are gaining value amid the expectations of USD weakness if there is QE3. According to Osama Tokashima, a currency strategist at Citibank, the currency pair may decline below 78.00 in the near future.
According to , the Japanese Yen keeps strengthening against the US Dollar. USDJPY is forming wave 3(С) or С(С) inside a bigger-scale upswing, represented by wave А(С) or shortened С of level Weekly.
A break below the local low will elongate the current wave through wave 5 or A inside the ‘Hound of the Baskervilles” pattern by Elder/MF. The closest level of support is located at 77.65. The downtrend will be completed as soon as the price overcomes the bottom of the MF sloping channel and consolidates below the MF pivot 79.10.
