Today, the focus has shifted on the FOMC meeting, where the Fed is expected to sound dovish and investors are hoping for more QE, which should be done more quickly than any fiscal stimulus, considering the split Senate.
On Thursday, the USDJPY pair was down 0.8% and it was trading at around 103.70, which are eight-month lows for this pair. Elsewhere, the USD was down against other major currencies as well, while stocks rocketed higher again.
More importantly, the USDJPY pair declined below Autumn’ lows of 104.00, which triggered some larger stop-losses, and the medium-term downtrend has been confirmed. The short-term outlook now also seems bearish.
The next targets for bears could be as follows> 103.10, 102.00 and 101.20. These levels were important during the March crash and bulls might want to defend these supports now.
Alternatively, if the pair starts rallying, for whatever reason, it needs to break above the previous support, now resistance, at around 104.00/10. Jumping above this resistance could switch the short-term outlook to bullish, targeting the 105 mark afterward.