USD/JPY technicals remain neutral - Scotiabank

Eric Theoret, analyst at Scotiabank, noted that USD/JPY short-term technicals look neutral, and and all eyes are on the September 21 BoJ policy decision.

Key Quotes

“JPY is flat, trading within a remarkably tight around Wednesday’s close, its modest movement driven by the broader market tone.” 

“There are no major domestic releases scheduled through the remainder of the week, and all eyes are on the September 21 BoJ policy decision. The meeting has been the subject of intense speculation with a wide ranging set of expectations and heavy bias toward greater stimulus. Gov. Kuroda is said to favor a dive deeper into negative rate territory however there appears to be ongoing pressure for an acceleration in the pace of asset purchases as well. A failure to deliver could see a replay of knee-jerk JPY gains (USDJPY decline) that followed the recent BoJ disappointments in July and April.” 

“USDJPY short-term technicals: neutral—USDJPY has yet to make a clear break of its recent consolidation around the 50 day MA (102.72). Momentum signals are neutral and the ADX is in trendless territory under 25. Near-term support has been observed around the 21 day MA (101.93) and near-term resistance is expected between 103.20 and 103.50.”