USD/JPY: bulls capped with bearish drift from overnight spike

USD/JPY has been drifting to the downside, currently testing the 102.20 support from a high of 102.60.

USD/JPY: 50 dma is a key upside target ahead of BoJ - Scotiabank

USD/JPY has rallied a cent from the region of 101.60 overnight with a strong comeback in the greenback. Meanwhile, the yen has been weak across the board into the closing sessions of the week and observers are awaiting the BoJ this month that is very much in play although the markets are taking the view that they are running out of ammunition which could further support the Yen especially in the event that the Fed hold this year while markets await the US elections as an additional risk factor supporting a bearish outlook for the major. 

US dollar index bounces and ends day higher

USD/JPY levels

With spot trading at 102.26, we can see next resistance ahead at 102.40 (Weekly Classic S1), 102.49 (Daily Open), 102.51 (Daily High), 102.53 (Hourly 100 SMA) and 102.61 (Yesterday's High). Support below can be found at 102.19 (Daily 20 SMA), 102.19 (Daily Low), 102.17 (Daily Classic PP), 102.11 (Hourly 20 EMA) and 101.74 (Weekly Low). Looking to candlestick patterns, we can see a Dark Cloud Cover formation on the 4-hour chart.

Valeria Bednarik, chief analyst at FXStreet notes that, "In the 4 hours chart, the price is now above its 100 and 200 SMAs, while indicators have bounced sharply from their oversold levels, maintaining sharp bullish slopes, but within negative territory."