USD/JPY directionless below 110 ahead of BoJ announcements on Wednesday

The USD/JPY pair stays in a very tight range on Monday.
Thin trading conditions on MLK Day keeps trading action subdued.
BoJ to announce monetary policy decisions on Wednesday.

Eren Sengezer FXStreet

Similar to many major pairs, the USDJPY pair stayed quiet on Monday amid a lack of significant fundamental drivers and thin trading conditions due to the Maritn Luther King Jr. Day holiday in the United States. As of writing, the pair was virtually unchanged on the day at 109.68.

On Wednesday, the Bank of Japan is scheduled to announce its interest rate decision and release the monetary policy statement. Last week, citing sources familiar with the matter, several news outlets reported that the BoJ was expected to cut the inflation forecasts to reflect the falling oil prices in its economic outlook report that will be published alongside the monetary policy statement on January 23rd.

Even if the BoJ adopts a dovish tone and maybe hints at boosting the stimulus program, the JPY could continue to stay strong against its major rivals as concerns over Brexit negotiations, the U.S. government shutdown, and the economic slowdown in China are likely to ramp up the demand for the safe-haven JPY.

On Tuesday, existing home sales data will be featured in the U.S. economic docket. Furthermore, investors will be paying close attention to the T-bond yields. The 10-year T-bond yield posted gains for five straight days and is now at its highest level since late December.

Key technical levels

USD/JPY

Overview:
    Today Last Price: 109.68
    Today Daily change: -0.07 pips
    Today Daily change %: -0.06%
    Today Daily Open: 109.75
Trends:
    Daily SMA20: 109.25
    Daily SMA50: 111.54
    Daily SMA100: 112.06
    Daily SMA200: 111.19
Levels:
    Previous Daily High: 109.9
    Previous Daily Low: 109.06
    Previous Weekly High: 109.9
    Previous Weekly Low: 107.99
    Previous Monthly High: 113.83
    Previous Monthly Low: 109.55
    Daily Fibonacci 38.2%: 109.57
    Daily Fibonacci 61.8%: 109.38
    Daily Pivot Point S1: 109.24
    Daily Pivot Point S2: 108.73
    Daily Pivot Point S3: 108.4
    Daily Pivot Point R1: 110.08
    Daily Pivot Point R2: 110.41
    Daily Pivot Point R3: 110.92

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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