- USD/JPY edged higher after the Bank of Japan (BOJ) maintained status quo as widely expected.
- The GDP forecasts have been revised higher, while the inflation forecasts have been revised lower as expected.
- The pair hit session highs at 113.28 before slipping lower to currently trade largely unchanged at 113.16 levels.
- Technically, an inverted Head and Shoulders formation and bearish divergence on Stochastics which raises scope for downside.
- The pair is currently holding above 20-DMA at 112.90, break below would see further weakness.
- On the flipside, retrace above 5-DMA could see minor upside till 114.55 levels.
Support levels - 113.45 (1H 200-SMA), 112.91 (20-DMA), 112.76 (23.6% Fib retrace of 107.31 to 114.45 rally)
Resistance levels - 113.76 (5-DMA), 114, 114.45 (Oct 27 high)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-Inverted-Head-and-Shoulders-pattern-and-bearish-divergence-raises-scope-for-downside-in-USD-JPY-976479) has hit TP1.
Recommendation: Book partial profits at lows. Bias lower, stay short for further downside.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -5.83029 (Neutral), while Hourly JPY Spot Index was at 140.484 (Bullish) at 0340 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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