After yesterday's sharp reversal, the USD/JPY pair regained some fresh traction on Thursday and held with minor gains above the 111.00 handle.
The pair had a muted reaction to the BOJ announcement to leave its monetary policy stance unchanged. The decision was widely expected, but market also ignored the central bank's upbeat assessment of the economy.
• BOJ keeps policy steady, economic outlook upgraded
Moreover, the pair also defied a mildly softer tone surrounding the US Dollar, led by Wednesday's disappointment from the US President Donald Trump's long-awaited tax reforms. The tax plan not only lacked any specific details but also offered little surprise to the markets and hence, failed to extend any additional support to the greenback's recovery move.
• US Policy: Still light on the crucial details – TDS
Market also seems to have shrugged off the prevalent cautious investors' sentiment, as depicted by subdued trading action around equity markets, which tends to boost the Japanese Yen's safe-haven appeal.
Focus now shifts to the ECB monetary policy decision, which might trigger a fresh bout of volatility in the FX market and provide some fresh impetus for the major.
Later during the NA session, the US economic docket that includes - monthly durable goods orders and pending home sales data, would also be looked upon to grab some short-term trading opportunities.
Technical levels to watch
Immediate resistance is pegged near mid-111.00s, above which the pair is likely to dart towards testing the 112.00 handle with some intermediate resistance near 111.80-85 region. On the flip side, the 111.00 handle now seem to protect immediate downside, which if broken could drag the pair initially towards 110.60-55 horizontal support ahead of the key 110.00 psychological mark.
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