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Despite all risks to the economy, the Japanese Yen has been one of the main gainers this year so far. The main reasons for such a solid performance is Haruhiko Kuroda's confidence, as well as stronger-than-expected boost provided by a spike in demand ahead of the April's tax hike. All these facts diminished hopes for fresh easing any time soon, while Ukraine tensions pushed demand for havens higher. After a 104-pip drop last week, the USD/JPY pair plunged to weekly S1 at 101.11 on Monday, with the next target located only around 100.69. Meanwhile, technicals and market sentiment are pointing at the bounce back from the current price, with 102.16 being a priority target for bulls.
For the first time in more than a month, Dukascopy Community members are bearish on the pair, with 58% of respondents having bearish view. For the sixth consecutive week the pair has been trading in a range between 103.02 and 101.11, represented by weekly S1. On Tuesday the pair has been trading in the lower part of the range, and according to traders, the price will rebound and head towards 101.76, just slightly above weekly pivot. Last time, traders were most successful in predicting USD/JPY performance, as there were 31% of correct votes, therefore, the above mentioned forecasts can be trusted.
Fundamentals are unlikely to provide any surprises, as policymakers in Japan and the world's largest economy are expected to stay pat on the monetary policy. Therefore, the pair will be driven by technicals. "USDJPY is threatening the mid channel support, showing some serious bearish action, but I will be waiting for a clear break with stability below 101.45 support, the key to confirming this bearish scenario. That would suggest a move to 100.80 next key swing low and support level as an initial target," said Ucef. Unless 101.45/11 holds, the outlook still remains bullish.
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