USD/JPY-Bulls came out from the cage of moving averages

By analyzing the daily technical chart we can see that  earlier pair has made a sharp counter attack towards north side from the 107.18 level with the formation of double bottom pattern and yesterday it came out from all the major and minor EM A lines which were like a cage. Well presently pair is sustaining above the moving average line which is a good news for buyers.

The Bank of Japan will announce its latest decision on monetary policy early Tuesday. No surprises expected as Japanese policymakers’ hand are tied by the massive stimulus already in place. The 20 SMA, continues heading north below the current level, currently providing a short-term support at around 108.50. The pair also stands above the 61.8% retracement of its latest daily decline, at 108.30. As long as it holds above this last, chances of a downward extension are quite limited, while the bullish potential will increase on a break above 109.00, where it peaked this July.

Early on Tuesday, the Bank of Japan (BoJ) will announce its decision on monetary policy. The BoJ “faces a triple dilemma: inflation is still far from its goal; other major central banks are easing; and its current framework is counterproductive when growth is slowing and yields are falling. Despite mounting pressure to do something, we do not expect any notable policy announcement”. They point out that a key dynamic for BoJ policymakers is the JPY. “Any notable policy action from the central bank is likely to be triggered by a stronger currency. For now, we expect the BOJ to be watchful of global FX moves.”

Regarding the greenback, the FOMC will start tomorrow it's 2-day meeting. On Wednesday a rate cut announcement is expected. Over the last days, the US Dollar gained momentum as traders market participants eased expectations of aggressive cuts. 

Well the way bulls are reacting it seems like they are not going to stop in early stage and 110.50 level is seems as unfinished target. Odds are in favor of bulls. Intraday  bias remains bullish on the pair.A daily closing above 109 level will open the way towards 110.50 level and furthermore in near term. A bullish crossover on the MACD indicator is generating bullish signal and RSI is also favoring the bulls for the time being.

The downtrend on the daily chart which has been breached out and pair is surviving above that level which indicates that pair will test the 112 level in coming weeks.  The 108 is immediate support level followed by 107.20 level whereas 110.50 level is immediate resistance level followed by 112.