Tomorrow the Bank of Japan will hold a regular meeting on monetary policy, where it may announce an increase in stimulus measures. The previous evening the US Federal Reserve ended its meeting, where it announced the preservation of the current monetary policy. According to the head of the Fed Jerome Powell, it is necessary to be patient and wait for strong reports on the labor market, after which we can begin to discuss the process of curtailing the quantitative easing program.

Now investors will buy this currency pair on expectations of new stimulus from the Central Bank of Japan, after which profit taking can be expected. The well-known trader’s adage will work: “buy the rumor, sell the fact”.

Trading recommendation: Buy 110.50/110310 and take profit 110.95.