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USD/JPY extends the range play below multi-month top ahead of BoJ

 

USD/JPY remains below a three-month high touched earlier this week as traders seem reluctant ahead of the crucial BoJ policy decision later this Thursday. The cautious market mood underpins the safe-haven JPY, which seemed unaffected by mixed Japanese economic data and exerts some pressure on the pair amid subdued USD price action.

 

The pair draws support from the image of a solid US economy, with all the other main economies slowing down. This endorses the idea that Fed easing will be only gradual, and keeps US Treasury yields and the USD buoyed.


In Japan, the uncertain political and monetary scenario after Sunday’s elections is weighing on the Yen. The Bank of Japan meets this week and is widely expected to keep interest rates on hold until the political context is clarified.


In the calendar today US Consumer confidence is expected to have improved in October, while the JOLTS Job Openings are seen declining moderately yet at levels consistent with a healthy labour market.


From a technical perspective, the bullish bias remains intact but the RSI shows a bearish divergence, warning that a correction might be ahead. Resistances are 153.90 and 155.10. Supports lie at 152.50 and 151.60.

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