USD/JPY rally loses steam right below the 145.00 resistance area

• The Dollar capitalizes on Yen's weakness after BoJ´s dovish statement.
• The BoJ crushes hopes of an exit from its ultra-loose policy and hints at further easing if needed.
• USD/JPY broader trend remains bearish while below 145.00.

The US Dollar rallied during most of Tuesday´s European market session after the Bank of Japan disappointed investors with an unexpectedly dovish monetary statement. The pair, however, has found resistance at the 145.00 area before pulling back to the mid-range of 144.00. 

The Bank of Japan reaffirmed its ultra-loose monetary policy and suggested the possibility of additional easing as, according to Governor Ueda, the outlook on inflation remains uncertain. These comments sent the Yen tumbling against its main peers.

USD/JPY Technical analysis

From a technical perspective, the pair has covered the expanding wedge formed during the last month it might need an additional impulse to breach the falling trendline support from mid-November highs.

In the calendar today, the US Construction activity is the main event today. Traders will be looking at Friday´s data with a special interest in the USPCE Prices Index for more info about the Fed´s rate path.

A clear break above 145.00 would increase bullish pressure towards 146.50 and 147.45. On the downside, support levels remain at 142.35 and 141.00.

USD/JPY 4-hour chart

 

Technical levels to watch