USD/JPY Jumps to 110.70 on BoJ Speculation
Speculations that the Bank of Japan would announce additional stimulus
next week triggered yen weakness across the board and the USD/JPY pair jumping to as high as 110.75.
A
powerful earthquake that hit the Japanese southern island earlier this
month is now fueling speculations that BoJ might announce an interest
rate cut following a two-day monetary policy meeting ending Thursday
next week.
Technical levels to watch
During
the early part of the week, the pair continued to face strong
resistance near 109.50 level, which was taken away on Wednesday. The
pair is now challenging its previous strong support turned immediate
resistance near 110.70-75 area, also coinciding with 50% Fibonacci
retracement level of 113.80-107.63 downfall.
On a sustained trade
above 110.70-75 resistance, the pair seems all set to reclaim 111.00
mark and extend its recovery 61.8% Fibonacci retracement level
resistance near 111.40-45 area.
Meanwhile on the downside, 38.2%
Fibonacci retracement level near 110.00 psychological mark now seems to
protect immediate downside. Ahead of the BoJ monetary policy decision
announcement, any further weakness below 110.00 mark is likely to be
limited by support near 109.40 level.
