USD/JPY breaks through 102.00 in early Asia

USD/JPY gunned through stop loss orders sub 102.00 in early Asian trade, with some speculators taking advantge of thin liquidity conditions to take out stop loss orders from those caught weak-handed following the failed rally post disappointing US data dump - retail sales, industrial capacity - earlier on Thursday.

USD/JPY bulls should feel frustrated by now

The pair shows a worrying inability to sustain gains despite its multiple attempts to move away from 102.00 round number. Range trading and respeting major macro levels in H4/Daily is still expected to be the name of the game in USD/JPY ahead of next week's BOJ policy meeting.

According to the latest news on this front, the WSJ reported earlier on Thursday that BOJ is said to be split over its monetary easing program, with some members considering that flexibility in bond purchases is the most sensible approach going forward. Speculation on a new strategy by the BoJ centered around lower interest rates to steepen the yield curve has been doing the rounds.

USD/JPY technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, wriites: "The USD/JPY pair extended its retracement from the weekly high set last Wednesday at 103.35, pressuring the 102.00 level in the US afternoon,  following the release of tepid US data. The pair oscillated in a wide range right after the release of the batch of American macroeconomic figures, with speculative interest finally opting to drop the greenback."

Valeria adds: "The bearish tone is firm in the short term, as in the 1 hour chart, the price has extended below its 100 and 200 SMAs, both converging around 102.30, while technical indicators head south within negative territory. In the 4 hours chart, the price is now below a bullish 100 SMA, around 102.50, but still above a horizontal 200 SMA, the immediate support around 101.60, while indicators turned sharply lower and are currently entering negative territory, in line with a new leg lower during the upcoming sessions."