USDJPY: Was pretty much unaffected by the action in the European majors

US$Jpy was pretty much unaffected by the action in the European majors and traded a tight range of 109.06/46, leaving the medium term outlook unchanged. A nimble stance will be required today though with the domestic CPI, Retail Trade, Industrial Production, and Jobs data all coming up ahead of the BOJ Meeting. No changes are expected although the statement may see some choppy trade.

1 hour/4 hour indicators: Turning lower

Daily Indicators: Up

Weekly Indicators:  Turning higher

Preferred Strategy:  As before, the daily and weekly momentum indicators look positive for further gains while the short term charts appear to be turning a little lower, so we may need some corrective work before the dollar can continue its current run to the topside.

If so,  on the downside, buyers will be seen today at 109.00/05, which should be reasonable support, and then at 108.80 ahead of the Monday low of 108.53, although that is a long way off and trading from the long side is again preferred looking for dips towards 109.00/108.80, with a SL placed under 108.50

A move above the current trend high of 109.45 would find offers at 109.65 and 110.00 ahead of 110.25, which should be strong if/when we get there. Further out, as we said before, note the reverse SHS formation, with the neckline at 107.85, which has now been broken and suggests a target at somewhere near 110.70.

Buy US$Jpy @ 108.80. SL @ 108.40, TP @ 110.40

Economic data highlights will include:

Tokyo CPI, Industrial Production, Retail Sales, BOJ Meeting/Interest Rate Decision/Statement/Outlook