FxWirePro: USD/JPY refreshes 20-year highs on dovish BoJ

Chart - Courtesy Trading View 

Spot Analysis:

USD/JPY spiked nearly 2% to hit fresh 20-year high at 130.95

Previous Week's High/ Low: 129.40/ 126.23

Previous Session's High/ Low: 128.59/ 126.94

Fundamental Overview:

The Bank of Japan (BOJ) earlier on Thursday, kept a neutral stance on the policy rates, held the rates unchanged at -0.1%.

BoJ tweaked its forward guidance on monetary policy bias and said it will conduct fixed-rate operations every day. 

The BoJ believes that Japan’s underlying economy is too fragile to tighten monetary policy. 

In the post-meeting press conference, BoJ Governor Haruhiko Kuroda said that risks to the economy are skewed to the downside for the time being.

Kuroda added that the central bank will stand ready to ease policy further if necessary.

Market participants now look forward to the US economic docket, for Advance Q1 GDP report and the usual Weekly Initial Jobless Claims for impetus.

Technical Analysis:

- Momentum is bullish, Stochs and RSI are sharply higher

- Volatility is high and rising, major moving averages are biased higher

- ADX and MACD support upside, Chikou span is biased higher

- GMMA indicator shows major and minor trend are strongly bullish

Major Support and Resistance Levels:

Support - 128.54 (5-DMA), Resistance - 131

Summary: USD/JPY likely to extend bullish streak. Scope for test of 2002 high at 135.16.