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Today’s free forex signals service is a buy on the USD/JPY as we expect the market to observe the Dollar’s upside in the wake of Fed tapering clues in the FOMC meeting.

On Wednesday, the USD/JPY pair reversed direction after closing the first two trading days in negative territory. The pair is currently trading at 109.51, up 0.27% on the day.

The markets have stabilized since Monday’s panic attack but are not yet far ahead. Taiwan and China are back from their extended vacation. China’s stock market performance was mixed. Shenzhen fell 0.25%, while Shanghai grew 0.4%. Taiwan gained 2%, while Japan’s Topix declined 1%. Hong Kong and South Korea had closed markets. During the week, the European Dow Jones Stoxx 600 is more stable on the second day but still lower. US indices barely closed the gap after Monday’s severe decline.

Following the People’s Bank of China (PBOC) decision to inject short-term cash, the market sentiment has shifted positively, making it more difficult for demand to find the yen. Futures for US stock indexes rose 0.35-0.55% on improving market sentiment. In addition, the 10-year Treasury yield is up 1%, which contributes to the USD/JPY’s daily gains.

At the same time, the Bank of Japan (BoJ) left its monetary policy parameters unchanged as expected. Still, Governor Haruhiko Kuroda reiterated that she would not hesitate to ease policy further and add weight to the yen if necessary.

In contrast, the US Dollar Index (DXY) traded near 93.20 for a second day, as investors waited to open large positions before the FOMC announcements.

The Fed is not expected to change interest rates, but the revised forecast summary, also known as the dot plot, is being studied for any changes in policy outlook. The USD/JPY pair could continue its momentum if the Fed confirms asset tapering by year’s end. On the other hand, the slowing global economy amid the calm tone could lead to a dollar sell-off and force the USD/JPY pair to decline.

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Free forex signals – Buy USD/JPY at 110.10

USD/JPY free forex signals

Instrument: USD/JPY
Order Type: BUY STOP
Entry price: 110.10
Stop Loss: 109.02
TP1: 111.72

Our Risk Setting: 1%
Risk / Reward Ratio: 1:1.5

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