Forex Zone (Forex Zone)
Czech markets  |  September 19, 2012 09:59:14

Japan's central bank does not want to be left behind


Early this morning announced the Bank of Japan (BoJ) has expanded its program to purchase assets and loans. The increase is equal to 10 trillion yen, and overall program as BoJ "ballooned" to 80 trillion yen. Increase of 10 trillion yen will be used to purchase long-term and short-term government bonds.

It is surprising that the BoJ is trying to use the same tools for 30 years and expect that the result will be different this time. The same way "printing money" went well, and soon the Fed is likely to be joined by the ECB. Surely you are asking the question, how long can the major central banks of the world print money before this economic nonsense turns against them, and when real crisis? If we look for the answer in Japan, so this new plant printing money can take decades. In this context it is surprising due to the fact that inflation is held low.

As regards developments in the monitored pair EUR / USDAnd the last slow, constant weakening. But did not show large daily range. Rather, it indicates profit taking. It worked well yesterday around the supports of 1.3065 and 1.3030, which we announced .

Today Japanese session showed a relatively large range, while EUR reacted positively to the announcement of a new printing of money the Japanese central bank. For today, we expect trading between 1.3115 and 1.3000. We see a great chance to test how yesterday's high and yesterday's low. In what order it comes, we know. Increased volatility may bring macro publication of reports from the U.S. at 14:30 and 16:00.

Currently, the currency pair EUR / USD traded at 1.3069 price. Below this we see significant price supports of about 1.3000 and about 1.2980. Above the current market price we see significant resistance around 1.3100 and about 1.3150.

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