Global FX: USD/JPY Up On BoJ Talk

The pair settled the session in minor negative territory, largely due to a firmer USD which benefited from the bounce back by USD/JPY which surged back above the key 100.00 level. The rally overnight by USD/JPY was primarily driven by the reports that officials at the Bank of Japan are to mull offering longer-term funds in market operations. In terms of EU-related commentary, it was reported that the ECB is backing away from any "big bazooka" style intervention to revive lending within the euro zone. Officials view the initiative as worthwhile but unlikely to be concluded soon or to have a big impact, one person familiar with the matter said. Another said expectations for the policy might have risen too high. Technically, supports are seen at the 200-DMA line at 1.3037, 1.3000 and then at 1.2956. On the other hand, resistance levels are seen at the 100DMA line at 1.3108, the 21-DMA upper Bollinger® level at 1.3131 and then at 1.3194.

GBP/USD
The release of better than expected macroeconomic data failed to support the pair which as a result settled the session in minor negative territory after the USD index staged a rebound. Still, the release of better than expected UK Construction PMI report underpinned the expectation that there is little need for the BoE MPC to adjust the Asset Purchase Facility (APF), which currently stands at GBP 375bln. Technically, support levels are seen at the 55DMA line at 1.5281 and then at the 21-DMA line at 1.5240, which then exposes the 10-DMA line at 1.5161. On the other hand, resistance levels are seen at the 61.8% Fibonacci retracement of the 1.5607 to 1.5008 move at 1.5378 and then at 1.5385.

USD/JPY
The pair settled the session higher as market participants reacted to reports that officials at the Bank of Japan are to mull offering longer-term funds in market operations, and may extend the terms of low interest lending to banks. In addition to that, the price action also benefited from reports that Japan government to call on public pensions to increase targeted stock holdings according to government official. According to government official, the government is to work out details of pension overhaul in summer. In terms of technical levels, supports are seen at 99.33, 98.95 and then at 98.65. On the other hand, resistance levels are seen at 100.42/73 and then at 101.00.