FXStreet (Mumbai) - USD/JPY’s gradual overnight upward momentum ran through fresh offers near the daily pivot located at 120.57 and the major dipped to lows, before recovering to 10-DMA, where it now trades. USD/JPY capped below daily pivot Currently, the USD/JPY pair trades -0.05% at 120.39, recovering slightly from fresh session lows struck at 120.25 in last hours. The bears retain control and keep the pair under pressure, as the yen garners some strength on the back of gains seen on Nikkei (+0.60%). However, the downside remains cushioned as the yen remains weighed down by the dismal retail sales figures from Japan, which reinforced beliefs that the BOJ could do more at Friday’s BOJ policy meeting, thus, offering some support to the bulls. Retail sales in Japan rose 0.7% m/m in September, missing estimates of a rise of 1.1%. In the day, the main risk event for USD/JPY is expected to be the Fed decision with markets now closely eyeing any change of words in the policy statement, as Oct rate hike bets are almost priced-out. USD/JPY Technical levels to watch The prices are seen recovering through the 10-DMA at 120.40, with the immediate resistance seen at 120.65/72 (hourly 100 & 50-SMA), above which the pair would climb further towards 120.94/121 (5-DMA + round number). To the downside, the immediate support in sight is located at 120.09/08 (20 & 50-DMA), below which 119.60 (daily S2) would be tested. For more information, read our latest forex news.