Bears are pausing ahead of key BoJ policy meeting

The dollar index started the week in negative mode and hit seven-month low in early Asian session but managed to regain traction and edge higher in European trading, signaling a pause after last week’s 1.5% drop.
The greenback came under fresh pressure after US inflation data, released last week, signaled that consumer prices continue to descend, adding to hopes that inflation has peaked, and the US central bank would further ease the pace of its policy tightening.
China’s opening and better than expected recent economic data, also contribute to optimism that the downturn would milder than initially estimated and boosting risk sentiment in the markets.
Investors also focus on BoJ’s policy meeting on Wednesday, as expectations that the central bank would wait until Q2 and end of Governor Kuroda’s term, to start changing its ultra-loose monetary policy are fading.
The dollar should come under fresh pressure if BoJ signals or decides to start tightening its monetary policy, as this would start to narrow the gap between the policies of two central banks and make yen more attractive.
Larger bears struggle at pivotal Fibo support at 101.94 (50% retracement of 89.15/114.72), with oversold daily studies contributing to scenario of consolidation / limited correction, before bears resume.
Upticks should remain below converged daily Tenkan-sen/Kijun-sen (103.44) to keep intact larger bearish structure for push through 101.94, towards targets at 100.44/00 (base of weekly cloud / psychological).
Caution on scenario in which BoJ would stay on hold that would temporarily boost dollar’s sentiment and allow for stronger correction, on break through barriers at 103.44 (daily Tenkan-sen/Kijun-sen) and 103.67 (weekly cloud top).

Res: 102.38; 103.07; 103.44; 103.67
Sup: 101.49; 100.44; 100.00; 98.92