- USD/JPY has breaks major support at 106.40, hits new 5-week low of 105.81.
- The Bank of Japan is expected to remain on hold at its monetary policy meeting scheduled on June 16.
- Uncertainty at FOMC meeting scheduled on June 14 to 15, also supports reasons for the BoJ to remain muted this Thursday.
- The pair remains capped below 5-DMA, has broken below 106.08 (weekly 200-SMA) and is testing lower Bollinger band at 105.75.
- Break below could see test of 105.55 (May 3rd lows) and then 105.20 (Oct 13th low).
- On the flipside, immediate resistance is seen at 106.40 (trendline) ahead of 106.82 (5-DMA).
Recommendation: Good to sell rallies around 105.95 levels, SL: 106.50, TP: 105.55/105.20