After intervention on Monday, the USD/JPY pair attempted a rise on Tuesday, but formed a shooting star at the end of the day. The Bank of Japan acted unilaterally, which is normally a recipe for failure, so we think that the pair will likely fall over time as this intervention will likely fail again. The markets will more than likely attempt to push much lower, and perhaps even test the lows again. The trade might take some time, but if history tends to repeat itself – this pair should revisit the bottoms over time. We would sell any short-term rallies.
Written by FX Empire