USD/JPY 20 dma first support
The high has been 119.06 so far since recovering from the 120.64 downtrend of 29th Dec and has made a base at the aforementioned 20 sma on the daily sticks. This level will be the first test in a sell off should the BoJ hold and surprise the markets with anything less than a dovish outlook given the recent rumours and comments from the authorities in the build up to this event in Asia tonight. That coupled with the FOMC outcome yesterday, the major could come under pressure.
USD/JPY levels and bullish scenario
Karen Jones, chief analyst at Commerzbank explained, "USD/JPY once again tests the 38.2% Fibonacci retracement at 118.88, where it has so far stalled. Intraday dips are indicated to hold at 117.65/40 and the intraday Elliott wave count is suggesting scope for 121.00/122.00. Above 119.08, yesterday’s high, would allow for a deeper retracement to 119.78, then the 61.8% retracement of 120.68."
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