USD/JPY suffered heavy selling pressure in yesterday’s trading when the FOMC meeting minutes revealed that not all Fed officials are in agreement with Bernanke’s tapering schedule. The minutes showed that some policymakers are still waiting to see significant improvements in the labor market before considering a reduction of bond purchases.
On its 4-hour time frame, USD/JPY appears to be finding support at the 98.50 minor psychological level. This is in line with the 38.2% Fibonacci retracement level.
Stochastic is in the oversold region, suggesting a potential bounce could take place soon. At the same time, a bullish divergence has formed when you connect the previous low from the middle of June.
By Kate Curtis from Trader’s Way