The BOJ’s tweak to widen the long-term rates cap to 0.25% from the previous 0.2% came off as a rate hike in disguise, sending the yen higher across the board.
Technically speaking, the RSI’s bearish divergence was a warning on an overstretched rally. Zooming out on the daily chart an overbought RSI suggests a pullback towards the 20 or 30-day moving average (149.00).
On the hourly chart, successive breaks below 151.30 then 150.80 have confirmed the turnaround. 151.80 is the resistance after the first round of sell-off.
