USD/JPY: Bulls follow through on strong dollar, weak Yen before BoJ and FOMC

USD/JPY is catching a bid through last week's closing highs, opening the week in Asia on the trajectory set by the bulls last week on speculation that the BoJ will be adding further stimulus very soon. 

USD/JPY is on the approach of the mid point of the 106 handle with a  high of 106.46 in a strong dollar environment with EUR/USD below the psychological 1.1000 level in these last number of sessions for the first time since the end of June's business.  For the week ahead, we have the BoJ and it was hinted over the weekend's G20 that there could be stimulus coming, at least further rate cuts for the time being. We also have the FOMC expected to hold.

BoJ: Kuroda not ruling out additional stimulus - ANZ

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the Momentum indicator keeps heading north in overbought  territory, while the RSI turned higher after a limited downward correction within positive territory. "Still, the 100 SMA in the mentioned time frame stands at the mentioned high, becoming a critical breakout point to confirm a new leg higher this week. 

In the 4 hours chart, the pair has lost its bullish tone, as despite the price is firmly above its 100 and 200 SMAs, the technical indicators have turned lower within negative territory, suggesting the pair may extend further its decline, particularly on a break below 105.40."