USD/JPY: upside looking favourable on a test of the 104.50 level

USD/JPY is currently trading in a bullish trend on the daily sticks and better bid in the Tokyo open following the lead on Wall Street where the DXY was close to the 98 handle as investors get behind the greenback again.

FOMC minutes: Arguments for both sides, a close call

USD/JPY bounced from the 100 handle late last month and was on a winning streak right until finding space on the 104 handle before anything meaningful came in from the bears to test below the 103 handle again at 102.80 at the start of this week.

However, the bulls have got back in charge the Yen has otherwise still managed to attract a bid elsewhere, signalling the uncertainty in the markets and a flight to safety from Brexit concerns and all the shenanigans in UK parliament and of course, the US presidential race going at full pace in the lead in to the elections on November 8th. Looking ahead , the BoJ, there has been upward pressure on yields that the BoJ could be looking to be accelerating JGB buying to essential cap such advances in global yields, especially with the recent rise in the oil price as a concern in the markets.

USD/JPY levels

In the 1 hour chart, Valeria Bednarik, chief analyst at FXStreet noted that technical indicators have turned sharply lower from overbought readings, although the price remains well above its 100 and 200 SMAs, with the shortest around 103.60. "In the 4 hours chart, technical indicators have also lost upward strength, but are far from presenting a bearish stance, while the price is well above its moving averages that slowly grind higher, supporting the case of a downward corrective move ahead of a new leg higher."