USD/JPY bulls can't get a foothold on 106, where now ahead of BoJ?

• USD/JPY: bulls unable to convince on the 106 handle.
• USD/JPY: topside resistance line pierced but not broken.

USD/JPY has been sent back below the 106 handle and is currently trading at 105.91, down -0.28% on the day, having posted a daily high at 106.24 and low at 105.46.

US stocks took a turn for the worst and weighed on the major that had otherwise been testing a key resistance level through 106.10 where repeated failures below the 106.51 daily Tenkan is exposing the downside and making for a series of lower highs in a fickle risk environment.

The latest moves can be attributed to investors monitoring the developments around N.Korea and the trade war noise while in the background, the Fed's course for monetary policy will be a deciding factor that will likely emerge as the key catalyst once again when the noise quietens down. Looking ahead, we have the nonfarm payrolls this Friday and before that, the BoJ where recent concerns about tightening have seemed to have passed.

BoJ - what to expect from Kuroda this time?

As analysts at ING explained, at the end of last week BOJ Governor Haruhiko Kuroda announced that the central bank would begin planning an exit from its monetary stimulus programme around April next year. "He went on to say there could be a policy change before the BOJ’s 2% inflation target was reached. However, yesterday he backed away from his statement saying that while the BOJ may find itself thinking about winding down monetary stimulus next year, but that didn’t mean it would be doing it," the analysts argued.

USD/JPY levels

A break of the 106.51 daily Tenkan opens risk through the 107 handle and right up to 107.80/90 on the wide ahead of 108.00. On the wide, 110.85 guards 111.44/50 as being a double Fibonacci retracement that is lining up with a lower and descending 200-D SMA at 111.30. A break of the 105 handle opens up space on the charts with little support on the way down 100.70/99.00 on the charts.