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FxWirePro: USD/JPY drops as BOJ eases policy further, outlook bearish

USD/JPY chart - Trading View 

BOJ eases policy further, boosts purchases of corporate bond, commercial paper, USD/JPY drops in the aftermath.

Yen remains underpinned on hopes that the further easing by the BOJ could help revive the economic growth prospects.

USD/JPY was extending weakness, albeit marginally as we write. The pair was trading 0.08% lower at 107.35 at around 04:10 GMT.

A potential 'Death Cross' (bearish 50-DMA crossover on 200-DMA) and bearish indicators keeps downside pressure in the pair.

The major is extending weakness below 200-DMA and upside remains capped at 21-EMA.

Daily cloud is major support and break below will confirm further weakness. Drag till 61.8% Fib at 105.20 then likely.

Strong resistance is seen at 21-EMA (107.88). Bearish invalidation only above 200-DMA.

Summary: Technical bias remains bearish. Break below cloud with rise in volatility will confirm weakness. 

Major Support Levels: 106.77 (Lower BB), 106.44 (50% Fib), 105.20 (61.8% Fib)

Major Resistance Levels: 107.88 (21-EMA), 108.30 (200-DMA), 108.50 (110-EMA)

Guidance: Watch out for break below cloud to go short. 
 

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