USD/JPY analysis: bears still in the drivers' seat

USD/JPY Current price: 101.05

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BOJ's decision to keep its economic policy unchanged boosted yen's demand last week, with the USD/JPY bottoming at 100.09 last Thursday, before settling around 101.05 at the end of the week. The Japanese Central Bank unveiled a new framework for economic policy, introducing the QQE Yield Curve Control, and decided to buy JBSs so that the 10-year yields will remain "more or less" at the current level, near zero percent, although the Bank will maintain the current pace of 80 trillion yen per month. The announcement fell short of market's expectations, as usual, although speculative interest was not  capable to push the price below the critical 100.00 mark. Policy makers' jawboning helped the pair to rebound by the end of the week, but the technical picture suggests that the upward potential is still well limited, as the 100 DMA extended its decline above the current level, now around 103.30, the level to surpass to consider additional recoveries. Nevertheless and in the same chart, technical indicators are losing upward strength below their mid-lines, suggesting limited buying interest around this point. In the 4 hours chart, the price has found some short term support around 100.65, the 50% retracement of the Abenomics era rally, and the immediate support, but remains below its moving averages while the RSI indicator turned south around 47, supporting the longer term outlook.  

Support levels: 100.65 100.35 100.00

Resistance levels: 101.10 101.60 102.00