USD/JPY: headed for a retest of the recent lows or will FOMC rescue the bulls?

USD/JPY bulls remained trapped overnight with the price below and failing at the 200 hourly SMA. Currently, USD/JPY is trading at 108.80, down -0.03% on the day, having posted a daily high at 108.88 and low at 108.69.

USD/JPY has opened in Tokyo after a series of data and the BoJ's Summary of Opinions where it was expressed that they must continue powerful monetary easing as inflation remains weak. significantly, the BoJ have adjusted their rhetoric somewhat around there now being chances that they will mull adjustment level of yield targets if the economy and price moves continue to improve, whereas before, this was only dependent on inflation hitting the rigged 2% target. 

Meanwhile, data-wise, Japanese IP for Dec preliminary arrived at 2.7% m/m vs the expected 1.5%. In terms of price action, its pretty quiet there ahead of the Trump's SOTU, the FOMC and Aussie COI so far. NY was subdued also with US 10-year yields closing at 2.71% from the previous 2.70% and the price ranged between 108.41/20.

USD/JPY levels

USDJPY: Allowing for a dip

USD/JPY analysis: yen remains strong, but investors pause ahead of US news

"The upward potential seems limited short-term, as in the 4 hours chart, the price remains well below bearish moving averages, as the RSI indicator consolidates around 44. The Momentum in the mentioned chart heads higher around its mid-line, but further gains are more likely on a break above the 109.20/30 region, where sellers are now aligned," Valeria Bednarik, chief analyst at FXStreet explained.