USD/JPY off session low, still in red below 102.00

Having touched a four-day low at 101.70, the USD/JPY pair has managed to bounce off session low but remained below 102.00 handle.

Currently trading around 101.85 level, the pair came under renewed selling pressure amid uncertainty over further BOJ monetary easing measured. BOJ is scheduled to announce its monetary policy decision during Asian session on Wednesday. 

Meanwhile, the greenback, as measured by the overall US Dollar Index, trimmed some of its stronger-than-expected US CPI-led gains recorded on Friday as market participants now look forward to this week's FOMC monetary policy statement for fresh clues over the timing of next Fed rate-hike action. 

Technical outlook

A team of analysts at XM Investment Research notes, "USD/JPY continues to trade in a range, thus keeping a neutral bias for the short term. After rebounding from the 100 yen area on August 26, the pair rose to briefly peak above the 104 yen level. It reached a high of 104.31 on September 2. Since then, the market has pulled back and is now pivoting the 50% Fibonacci retracement level (102.20) of the recent August to September rise. The RSI is flat and hugging the 50 level, which suggests consolidation in the near term."

"To the upside, prices are capped at the 50-day moving average at 102.70, which also happens to be the 38.2% Fibonacci level. Prices would need to rise above this resistance level and clear the key 103.00 level in order to see more upside momentum towards 103.40 and 104.00."