The pair hit a session low of 111.76 as it takes out support levels at 112.00
Sellers remain firmly in control of the pair as we get the European trading session underway. The pair is now trading at 111.80, close to the lows, but what levels should we look for next?
As bias remains to the downside and the fact that we have broken free of short-term ranges, it's time to look at the bigger picture again. The near-term support for the pair now is at the 200-day MA which sits at 112.72. And if sellers break through there, it's quite a move to go before the next support level that sits at the 27 November low @ 110.84.
The catalyst of the move over the last two days has been the BOJ announcement to "taper" its bond purchases here. I've mentioned before that the move has no impact on monetary policy but it does signal some form of intentions by the BOJ - though not a very significant one as of yet. If this is just a taste of what is to come when the BOJ actually starts removing stimulus, USD/JPY may head back below 100 for all we know.
