FxWirePro: USD/JPY rangebound below 21-EMA after BoJ's status quo, focus on US PCE Inflation for direction

Chart - Courtesy Trading View 

Spot Analysis:

USD/JPY was trading rangebound below 21-EMA at 146.57 at around 06:55 GMT

Previous Week's High/ Low: 151.94/ 146.16

Previous Session's High/ Low: 146.93/ 145.10

Fundamental Overview:

The Bank of Japan (BoJ) held interest rates at ultra-low levels as expected. BOJ matched broad market forecasts, kept its benchmark rate at -0.1% and the Yield Curve Control (YCC) practice to defend the 10-year JGB yields near 0.0%. 

The central bank also raised its inflation forecast for 2022, indicating more near-term pain for the Japanese economy.

On the data front, data released earlier on Friday showed that inflation in Tokyo hit a 33-year high in October.

On the other side, the U.S. economy grew more than expected in the third quarter. US Gross Domestic Product (GDP) rose 2.6% on an annualized basis, beating expectations.

The reading also showed that U.S. inflationary pressures did not have as bad an impact on the economy as initially feared.

Data might favor the easy rate hike talks for December in the next week’s Federal Open Market Committee (FOMC) meeting.

Technical Analysis:

- USD/JPY capped below 21-EMA, the pair fails to build onto previous session's Dragonfly Doji

- Price action remains below 200H MA

- Momentum is with the bears, Stochs are sharply lower, while RSI is flat 

- MACD and ADX support downside in the pair

Major Support and Resistance Levels:

Support - 143.53 (55-EMA), 139 (110-EMA)

Resistance - 146.73 (21-EMA), 148.51 (200H MA)

Summary: USD/JPY pivotal at 21-EMA, decisive break above required for upside. Focus now on the US Core PCE Price Index for September, expected to rise to 5.2% versus 4.9% prior for impetus.