Wednesday, October 7, 2015

USD/JPY: Bears in control below 120 as BOJ sits tight

FXStreet (Mumbai) - The USD/JPY pair halted the brief recovery on the 120 handle and ran through fresh supply, in an immediate reaction to the Bank of Japan (BOJ) monetary policy decision.

USD/JPY back below 120 handle

Currently, the USD/JPY pair trades -0.20% at 119.96, having struck fresh session lows at 119.80 after the announcement. The BOJ offered no new surprises at its latest policy meeting today, leaving the monetary policy settings unchanged with asset purchases to increase at an annual pace of about 80 trn yen.

The BOJ move was widely expected, although boosted the yen versus the US dollar, knocking off the pair nearly 40 pips from around 120.15 region.

Markets now await the BOJ press conference and any new comment from the Governor Kuroda, which may provide fresh impetus to the major.

USD/JPY Technical levels to consider

To the upside, the next resistance is located at 120.37 (Today’s High) levels and above which it could extend 120.56-57 (Oct 5 & 6 Highs). A break beyond the last, the pair could climb further for a test of 50-DMA located at 120.96. To the downside immediate support might be located at 119.22-21 (Sept 29 & 24 Lows). A breach of the last, the pair could drop to 118.83 (Sept 8 Low) levels.
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