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USD/JPY selling off ahead of BOJ, 118.50 caps downside

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 29, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Bali) - USD/JPYis coming under strong selling pressure ahead of the much-awaited BOJ monetary policy decision, with the spot trading near 118.50 last, new session lows, with last minute position adjustments taking place.

    Inflation makes no progress ahead of BOJ

    Earlier on the session, disappointing inflation and household spending data out of Japan only strengthened the case for the BOJ having to do more if they are to remain credible in achieving the 25 inflation target in due time, which at this time looks like a very difficult mission.

    Read today's BOJ preview here: BoJ preview - what to expect in USD/JPY?

    USD/JPY technicals

    Technically, Valeria Bednarik, Chief Analyst at FXStreet, notes: "Short term, the 1 hour chart shows that the price has been confined to a tight intraday range above its 100 SMA, the immediate support now around 1118.50. In the same chart, the technical indicators have turned south around their mid-lines, lacking directional strength at the time being."

    "In the 4 hours chart, the pair is halfway between its moving averages, while the technical indicators have turned south, but remain above their mid-lines. The JPY may likely appreciate if the BOJ remains on hold, with a break below 118.10 opening doors for a steady decline on Friday."
    For more information, read our latest forex news.

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