Wednesday, October 7, 2015

USD/JPY: Reverses a downward freak spike ahead of BOJ

FXStreet (Mumbai) - Expectant of the BOJ decision any moment, the USD/JPY pair witnessed a algos-led freak spike to the downside and reverted to familiar ranges above 120.10 region, where the hourly 100 and 200-SMA coincide.

USD/JPY bounces-off a brief dip below 120 handle

Currently, the USD/JPY pair trades modestly flat at 120.17, swiftly retracing from a dip to 119.92 session lows. The USD/JPY pair regained 120 barrier in last minutes after the wild swings, with no catalyst seen behind the moves, while all eyes remain on the BOJ outcome.

Although its widely expected that BOJ is going to sit tight this time ahead of its Oct 30 economic outlook meeting. The prospects of BOJ rolling out additional stimulus cannot be ruled out, as suggested by Goldman Sachs on Tuesday.

Now its only a wait and watch until the BOJ springs up with the decision due for announcement any moment.

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 119.92 (Today’s Low). A breach of the last, the pair could drop to 119.22-21 (Sept 29 & 24 Lows) levels.
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