USD/JPY: Bears Held Up at 4hr 200 SMA, So Far
USD/JPY opened on the back foot for a test below the 111 handle in an extension of the early Asia grind lower from highs of 111.29.
USD/JPY is a sideways play on a slow start to the week while on Wall Street, the atmosphere was subdued and this has has followed through in the open of Asian equities. However, we are embarking on a busier time as U.S. data will start to filter through ahead of the FOMC and BoJ.
A data packed week ahead in the U.S. - UOB
There has been some chatter that the BoJ will not be making any movements on recent announcements by BoJ officials that there is a need to extend stimulus in the Japanese economy, but June might be a more appropriate time for action according to word on the street today and that has enabled some downside in USD/JPY and sparked profit taking.
USD/JPY has been within a tight range between 110.83 and 111.32, resisted by the 20 sma on the hourly chart. The 4hr 200 sma is located at 111.05 and should it give, we will be looking at the 200 sma on the same time frame at 109.47. However, Valeria Bednarik, chief analyst at FXStreet suggested that the downward potential is now seen as limited, suggesting so, so as long as the price manages to hold above 110.65, a strong static support zone.