USD/JPY finds support at 104.00 handle, recovers to 104.30

The USD/JPY pair remained well offered and tipped below 104.00 handle to a fresh session low level but now seems to have found some support at lower level and is currently trading off session through at 104.30. 

The pair came under intense selling pressure on news that the Japanese stimulus package might turn-out to be in the tune of 6 trillion Yen, which was well short of market expectations of around 20-30 trillion Yen. 

Further downside below 104.00 handle was limited as investors now look forward to the outcome of BOJ monetary policy meeting on Friday, where majority of the economists expect the central bank to announce additional monetary stimulus.

Moreover, market participants also remained cautious ahead of Wednesday's monetary policy decision announcement from the Federal Reserve. The key focus area would be the accompanying statement that will be scrutinized to determine the timing of next Fed rate-hike decision. 

Technical outlook

Mohammed Isah, Technical Strategist at FXTechstrategy, notes, "On the downside, support comes in at the 105.00 level where a break if seen will aim at the 104.50 level. A cut through here will turn focus to the 104.00 level and possibly lower towards the 103.50 level."

"On the upside, resistance resides at the 106.00 level. Further out, we envisage a possible move towards the 106.50 level. Further out, resistance resides at the 107.00 level with a turn above here aiming at the 107.50 level. On the whole, USDJPY looks to weaken further on bear pressure."