Following the agreement of the G7 countries to intervene jointly in the forex markets (for the first time in more than 10 years) to stop the yen’s rise against the US dollar, the Bank of Japan intervened in the forex market at 9:00 a.m. Tokyo time.

The coordinated intervention, requested by Japan, will be carried out in each country’s foreign exchange market intermittently throughout the day (meaning, it’s not over yet, don’t hold shorts in the yen crosses today wherever on the planet you live!).

The move represents a major shift in forex policy for the US and Europe, which have not intervened in the currency markets since 2000.

Soon after the BOJ intervention, the yen dropped against the US dollar to the 81.xx range from above 79.xx yen. The EUR/JPY forex pair, which traded in the 110.xx range in the last hours of North American trading is currently (05:30 am London time) at 115.xx Congratulations to those that made some fast money!

For those of you who, like, didn’t have an open (long) position, here’s the hourly chart of the EUR/JPY forex pair so you can drool some

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The euro broke the downward channel formed during the first 4 days of the past week finishing off at just above 1.39 with an amazing rally during the North American forex trading session on Friday. Will we see 1.40 on Monday? It’s very probable!

Here’s the 4-hour chart of the EUR/USD forex pair:

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Yep, my forex calendar shows that there’s great news coming out tomorrow: The Japanese Monetary Policy Meeting Minutes. But you know what? Most everyone will not give a damn. New Zealand and Australia will have a bank holiday, and most of Europe and the US will be rather hung-over to engage in market battles. So, take it easy there at least until Tuesday. Cheers!

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(1) Yesterday’s candlestick is a doji with a lower high and a lower low than the previous day’s candlestick (which is also a doji).
(2) The Dow used to have a positive correlation with the EUR/USD. “The Dow is up” usually meant “EUR/USD is up, too”. Yesterday though, EUR/USD wasn’t in any way helped by the Dow soaring past 11,000.
Well, these are my 2 cents
Feel free to add yours in the comments section below.
Have a good weekend!

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