The USD/JPY has backed away from yesterday's highs after the currency pair was deflected by our 2nd tier downtrend line. Today's strength in the Yen came despite the fact that the BoJ's meeting minutes showed that just because the central bank decided to halt its corporate bond purchase program, this doesn't necessarily imply that the BoJ will reign in liquidity any time soon. In fact, analysts predicted that the BoJ would end the program since it hasn't received much interest from corporations.
Fortunately for bulls, the USD/JPY has found support at its psychological 90 level and our 2nd tier uptrend line. Furthermore, both the EUR/USD and GBP/USD are heading higher following their respective monetary policy decisions. The question becomes whether the EUR/USD and GBP/USD can make a commitment to their near-term uptrends. Such a movement could be positive for the USD/JPY as long as U.S. equities follow suit. We've recently seen the USD/JPY head higher with broad-based risk rallies, implying investors view the Dollar as a riskier asset than the Yen. Therefore, investors should keep an eye on today's activity in the USD/JPY's correlations, particularly the GBP/USD since its technical resistances are wearing thin.
Technically speaking, the USD/JPY has our 1st and 2nd tier uptrend serving as technical cushions along with 11/03 and 10/13 lows. Furthermore, the psychological 90 level should continue to play an important role for the time being. As for the topside, the USD/JPY faces multiple downtrend lines along with 11/04 and 10/29 highs. There is still a long-term downtrend at work in the USD/JPY. As a result, near-term topside movement will likely be hard-fought.
Present Price: 90.31
Resistances: 90.44, 90.57, 90.68, 90.79, 90.93, 91.12, 91.27
Supports: 90.28, 90.18, 90.04, 89.91, 89.77, 89.61, 89.37