Technical Outlook USDJPY 20.07.2017

Technical Outlook USDJPY 20.07.2017

USDJPY bounces above 112.00 after BoJ

USDJPY

The pair extended above 112.00 barrier on Thursday after Bank of Japan kept policy unchanged as expected and pushed back timing for 2% inflation target.
The central bank also cut inflation forecast and lifted GDP forecast for next two years.
Yen’s bulls are taking a breather after strong rejection at plethora of supports at 112.00 / 111.50 zone on Wednesday, when trading ended in long-legged Doji, signaling indecision.
Slow stochastic on is reversing from oversold territory on daily chart and is seen supportive for further correction of 114.49/111.55 downleg.
Scenario requires firm break above 112.70 resistance zone (20SMA / Fibo 38.2% of 114.49/111.55) for confirmation.
Otherwise, near-term risk will remain shifted to the downside on recovery attempts stall.
Firm break below 112.00/111.50 support zone would risk attack at widening daily cloud (spanned between 111.23/110.76).

Res: 112.32; 112.67; 112.75; 113.00
Sup: 112.00; 111.76; 111.55; 111.23