USD/JPY seesaws around monthly low ahead of BOJ

USD/JPY stays below intraday high of 105.07 to keep the sub-105.00 area.
FOMC stayed ready for longer easy money policies while upwardly revisiting economic forecasts.
Japan’s Yoshihide Suga official gains the PM’s throne, Abenomics may continue.
BOJ may follow American counterpart to mildly revise the economic outlook while keeping monetary policy unchanged.

Anil Panchal FXStreet

USD/JPY bounces off the day’s low of 104.87 to 104.94 as traders in Tokyo arrive for Thursday’s work. In doing so, the yen major shrugs of the Fed-led gains while snapping the four-day losing streak. It should additionally be noted that the quote stays near the monthly bottom of 104.80, flashed Wednesday, ahead of the Bank of Japan’s (BOJ) monetary policy meeting, up for publishing around 03:00 AM GMT.

Can BOJ try to please new PM?

After the US Federal Reserve (Fed) slightly revised the economic forecasts and still conveyed their bearish bias, which strengthened the US dollar, the BOJ may follow the footsteps of Powell and Company to mark their intelligence in front of the new Prime Minister Suga.

The Federal Open Market Committee (FOMC) respected their Average Inflation Targeting (AIT) while suggesting ultra-low interest rates for a bit longer period. Though, reluctance to act in the short-term gained the market’s attention to please the US dollar buyers.

Following the Fed-led action, global markets witness dull trading amid hopes of receiving the coronavirus (COVID-19) vaccine soon and uncertainty over the US stimulus. Also challenging the trading sentiment could be US President Donald Trump’s dislike for the World Trade Organization’s (WTO) verdict to favor China.

Against this backdrop, S&P 500 Futures drop 0.40% and the Nikkei 225 is also down, currently losing 0.62% to 23,320.

Even if global markets fear short-term brake to the further easy money, as signaled by the US central bank, BOJ’s likely bearish bias can keep the equity traders happy. Looking at the USD/JPY, the pair may remain pressured as the latest recovery in Tokyo’s economics, coupled with Suga’s arrival as the PM, can favor the Japanese yen (JPY) despite the BOJ’s expected status-quo.

Read: BOJ Preview: New Prime Minister, same old policy

Other than the BOJ, monetary policy meeting by the BOE and second-tier data from the US, Europe and Switzerland can also offer a busy day ahead.

Technical analysis

While August month’s low of 105.10 offers immediate resistance to the pair, buyers are less likely to be convinced unless witnessing a daily close beyond the 50-day SMA level of 106.12.

Additional important levels

Overview
Today last price	104.98
Today Daily Change	0.02
Today Daily Change %	0.02%
Today daily open	104.96

Trends
Daily SMA20	105.96
Daily SMA50	106.17
Daily SMA100	106.79
Daily SMA200	107.79

Levels
Previous Daily High	105.44
Previous Daily Low	104.8
Previous Weekly High	106.38
Previous Weekly Low	105.79
Previous Monthly High	107.05
Previous Monthly Low	105.1
Daily Fibonacci 38.2%	105.05
Daily Fibonacci 61.8%	105.2
Daily Pivot Point S1	104.69
Daily Pivot Point S2	104.42
Daily Pivot Point S3	104.05
Daily Pivot Point R1	105.33
Daily Pivot Point R2	105.71
Daily Pivot Point R3	105.97

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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