The US Dollar (USD) rallied against the Japanese Yen (JPY) on Monday, increasing the price of USDJPY to more than 104.25 after opening with a large gap. The technical bias remains bullish because of a Higher High and Higher Low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 104.42. A support can be noted around 104.12, the horizontal support level ahead of 102.55, the swing low of the recent downside move as demonstrated in the given below daily chart. A break and daily closing below the 102.55 support shall increase selling pressure, validating a downside move towards the 100.00 zone.

On the upside, the pair is expected to face a hurdle near 105.32-105.53, the confluence of horizontal resistance as well as swing high of the recent upside rally ahead of 107.50, the high of the last major upside rally. The technical bias will remain bullish as long as the 100.08 support is intact.

BoJ Meeting Minutes

A majority of Bank of Japan policymakers believe it could take time for inflation expectations to firm, underscoring lingering doubts on how effective the BOJ’s new policy framework would be in achieving its ambitious 2 percent price target. The nine board members also disagreed on whether the BOJ’s massive stimulus program would help spur public expectations of future price rises, minutes of the central bank’s September policy meeting showed on Monday.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair on dips still appears to be a good strategy in short to medium term as bulls seem to gain strength.