USD/JPY: nearing critical 110.20 support
|USD/JPY Current price: 110.51
- BOJ to maintain easing but upbeat on inflation.
- US Treasury yields retreated on US Government shutdown end, helping the JPY.
The USD/JPY pair plunged to the lower end of its monthly range, in a mixture of market events that backed the JPY. The pair rally up to the 111.20 from late Monday after the US Government shutdown was reverted but pulled back as Treasury yields eased on the news. The 10-year note yield stands at 2.63% ahead of the opening, down from 2.66%. Further helping the Japanese currency was the Bank of Japan's monetary policy meeting outcome. The Central Bank left its monetary policy unchanged but was upbeat on inflation prospects. Nevertheless, Governor Kuroda reiterated that the ongoing easing will continue and that is no time of thinking about trimming QQE, determine to maintain the strong monetary easing, as prices are still weak.
The 4 hours chart shows that the pair continues developing below bearish 100 and 200 SMAs, while technical indicators are now consolidating within bearish territory, with no clear directional strength, anyway leaning the scale toward the downside. The pair has an immediate support at 110.19, the 4-month low set last week, and a stronger one in the 109.80 price zone. A break below this last should open doors for a steeper and continued decline during the following sessions.
Support levels: 110.20 109.85 109.50
Resistance levels: 110.90 111.20 111.60
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