USD/JPY recovery capped at 102.00, maintains near-term bearish bias

The USD/JPY pair maintained its near-term bearish bias and is now struggling to bounce back 102.00 handle amid uncertainty around BOJ monetary policy decision.

Market participants remain divided over possibilities of further BOJ easing when the central bank announces its monetary policy decision during Asian session on Wednesday. Currently trading around 101.80-85 band, the pair is also being weighed down by fading expectations of any rate-hike action from the Fed this week. 

From technical perspective, the pair remained stuck in a broad trading range between 103.00-101.00 area. Nevertheless, Wednesday's BOJ and the Fed announcements are expected to trigger a fresh bout of volatility in the currency market, which would provide the required impetus for the pair to break through its trading range. Hence, it would be prudent to wait for a decisive break through the ongoing trading range before confirming the next leg of direction move for the pair. 

Technical levels to watch

From current levels, 101.75 (session low), which is closely followed by 101.60-55 (yesterday's low), are likely to act as immediate support levels, which if broken is likely to turn the pair vulnerable to extend its slide further towards the near-term trading range support near 101.20 level. On the flip side, recovery momentum above 102.00 handle now seems to confront strong resistance at 102.25-30 area above which a fresh bout of short-covering is likely to boost the pair immediately towards 50-day SMA resistance near 102.65-70 region.