Bank of Japan Governor Haruhiko Kuroda said in parliament that the Bank of Japan has plenty of room to cut interest rates further and, theoretically, the interest rate can fall to -0.5%.
While the Bank of Japan kept interest rates and policy on Tuesday, Kuroda underlined the readiness to take steps in three sides, namely the rate cuts, accelerated increase monetary base, or increase purchases of risky assets. When asked by the parliament, he agreed that it is theoretically still possible to cut interest rates to -0.5%.
USDJPY Technicals:
USD/JPY currently testing resistance area at 113.91-114.44. Hourly stochastic and CCI are overbought in general.
Watch for bearish signal confirmation within the resistance area with target at 113.06-112.70.
Be careful if the resistance at 114.44 breaks, because it will turn the intraday bias to bullish and possibly will be followed by a bullish move up to 115.04-115.54.
Free Reports:
Sterling tends much to not react much and traded lower against the US Dollar on Wednesday’s European session, although the most recent UK economic data indicated that labor market conditions are still tough amid gloomy prospects for the global economy.
Report of the Office of National Statistics (ONS) showed jobless claims in the United Kingdom decreased by 18,000 last month. Wage growth in a period of three months to January was also reported to grow at an annual rate of 2.1%, higher than expected and the previous month’s figure. While the overall unemployment rate remained steady at 5.1%, the lowest since early 2006.
GBPUSD Technicals:
GBP/USD currently is testing intraday key support at 1.4052. If the support breaks, poundsterling might continue its bearish move to 1.4013-1.3980. The price currently is moving below 20 MA and 50 MA on hourly chart.
Note that stochastic has crossed up but CCI is overbought. As alternative strategy, watch for bearish signal confirmation on a pull-back move to within the reference area at 1.4107-1.4141 with target at 1.4085-1.4052.
Be careful if the resistance at 1.4141 breaks, because it will turn the intraday bias to bullish and possibly will be followed by a bullish move up to 1.4165-1.4196.
By Andrew Bulan, analyst for EconomicCalendar.com