Yen loses ground on unchanged BOJ

USDJPY was sharply up during the late Asian / European session on Tuesday (up 1.3% so far) in strong acceleration after dovish Bank of Japan deflated yen.

The central bank kept its ultra-loose monetary policy unchanged and maintained  forward guidance, disappointing those who expected signals about the start of tightening cycle.

The pair is in near-term recovery for the third straight day, with today’s advance bring the biggest since Oct 31 and contributing to positive outlook.

Fresh bulls broke above daily Tenkan-sen (144.14) and pressuring pivotal Fibo barrier at 145.13 (38.2% retracement of 151.90/140.95).

Daily close above Tenkan-sen to validate recovery, with firm break above 145.13 to generate reversal signal and expose next key barriers at 146.50 zone (50% retracement / daily Kijun-sen / Dec 11 lower top).

Daily studies are improving, though caution is still required as 14-d momentum indicator is still in negative territory.

Res: 145.13; 145.99; 146.43; 146.58

Sup: 144.14; 143.53; 142.60; 142.06