From yesterday: “USD/JPY rallied to 120.43 yesterday, but retraced to below 120 overnight. The pair remains in a range and heavy as long as under 120.50/70. We expect the pair to target 119.30 today and a break lower would give scope for a test of 119 or 118.60. To the upside, bounces should be capped first at 120, then at 120.40/50. A break of 120.77/121 would be bullish for the pair in the medium-term”.

USD/JPY stayed in its range despite some volatile bursts before and after the FOMC meeting minutes released yesterday at 20:00 CET. The pair is capped by a strong resistance area around 120.70/121 and supported above 119.30 in the near-term. As long as it stays below the resistance, we still favour a move to test 119.30 and a break here will give scope for a move towards 118.30. The broader range in the pair remains between 121 and 116, and only breaks out of this range will give direction in the medium-term.