Having forcibly rejected the 108 handle late last week, the prevailing trend of subtle HH's and HL's on USDJPY over the past month seems to be losing steam. Embedded within a prevailing downtrend, my analysis contextualizes this move as the final leg of a tripartite corrective structure closely resembling that of an expanding flat with a C with that comprises a rising wedge with MACD divergence. Now that price has slipped beyond trendline support, that trendline becomes resistance by extension as price forms a subtle, flag-like protrusion before breaking out lower.
Fundamentally such a move relies primarily on USD weakness paired with capital flows from China into Japan vis a vis trade war rhetoric, as the BOJ cannot be relied upon to comment on JPY strength at this time (as JPY core inflation still sits well below the bank's 2% target, despite a year of phenomenal economic expansion in 2017). Look forward to the BOJ outlook report following the rate decision for clues on guidance, and remember that with the BOJ "no news" is often big news for the market.
Fundamentally such a move relies primarily on USD weakness paired with capital flows from China into Japan vis a vis trade war rhetoric, as the BOJ cannot be relied upon to comment on JPY strength at this time (as JPY core inflation still sits well below the bank's 2% target, despite a year of phenomenal economic expansion in 2017). Look forward to the BOJ outlook report following the rate decision for clues on guidance, and remember that with the BOJ "no news" is often big news for the market.