- USD/JPY bulls are accumulating the drop.
- Bears will be looking to target the 113.50 sell stop one.
The focus for the yen today will be the Bank of Japan. However, there has been no inflation surge in Japan, unlike what we have seen driving other central banks to take action. It is set to keep its policy on hold again and drivers for USD/JPY will likely stay with the US bond and stock market.
From a technical perspective, USD/JPY is in a state of consolidation between a wide range on the daily chart. However, there are prospects of a short term correction on the hourly time frame that could leave a bearish opportunity into the end of the week as follows:
USD/JPY H1 chart
The price is attempting to correct and the 38.2% Fibonacci retracement level is a compelling target given the buy stops that will be above the 113.80 level and prior highs.
USD/JPY daily chart
From a daily perspective, the price could be in the process of forming a bearish head and shoulders:
