The US dollar regained ground versus the yen, going into the October 30 FOMC meeting. USD/JPY touched the levels above 108 yen, pulling the majority of sellers out of the market. Weekly close above the 108 figure will completely switch the market into a bullish mode, opening the way for another retest of the 110 figure. Support lies at 107.50/30 and 106.40.
The next week promises to be volatile for the pair. Dollar is expected to remain strong at least ahead of the FOMC meeting on Wednesday: QE program will likely be finished. US GDP on Thursday could disappoint the bulls, however. Japanese economic calendar for the next 7 days is busy with the Bank of Japan policy meeting being a key risk event. Pay special attention to the press-conference that follows.
By Kira Iukhtenko, FBS