USD/JPY stuck in a narrow trading band ahead of US data

After staging a minor recovery from sub-102.00 level, the USD/JPY pair remained stuck in a narrow trading band and traded in neutral territory around 102.40-45 band ahead of US economic releases.

A slight improvement in risk appetite helped the pair to erase early losses. The recovery, however, lacked momentum and has failed to lift the pair back above 50-day SMA immediate resistance near 102.70 region as markets now brace for a possible spike in volatility on BOE monetary policy decision.

Later during NA trading session, a slew of US macro releases would help investors evaluated the possibilities of an eventual Fed rate-hike at its meeting on September 20-21 and would trigger the next leg of move for the pair. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "the 1 hour chart shows that the latest bounce came after the price test its 200 SMA, whilst the 100 SMA heads modestly higher below it, and indicators bounced from their mid-lines, suggesting the downward potential is limited. In the 4 hours chart, technical indicators have also bounced from their mid-lines after the intraday pullback, whilst the price remains well above a bullish 100 SMA, currently around 102.20, in line with the shorter term perspective, and favoring a new leg higher on a break above the mentioned daily high."

"Support levels: 102.45 102.10 101.65
Resistance levels: 102.90 103.35 103.80"