Stay below 110.98-04 eyed now
The USDJPY is trading near session lows and below the 110.98-111.04 area. If you recall from last week, this area was swing lows form February. Each test led to a sharp move higher (see chart below).
Last week, the price moved above this area and raced higher. Today, it is back below (bearish). Stay below and the sellers are taking back control. Fail and the price goes higher. Key line in the sand area for the pair.
Of course the BOJ will be meeting this week. Last week, the price moved higher on speculation they would stimulate further. This should keep a bid underneath. How low can it go if the buyers can not push it back above the 111.04 level? The 50% of the move up from Friday's low comes in at 110.565. So far though the low for the day is holding. A move above 111.04 may be it for the downside. Key test (see chart above).