USD/JPY Continues Range Trading before BOJ Minutes

USD/JPY (daily chart as of June 13, 2014) retreated from around 102.80 on June 4, and then found temporary support right above the 200-day EMA yesterday. As we have mentioned previously, 102.70-102.85 is a key resistance zone to watch, and it appears that the pair is forming another cluster (red shadows on chart) below 102.85.

Note that current price is now trading in a large triangle range between the 200-day EMA and the medium-term downtrend line, or a descending triangle range between 100.75 and the medium-term downtrend line. The pair needs to clear the resistance zone and the downtrend line for more upside momentum.

If price breaks out above the strong resistance barrier, it could trade higher to test the 103.75/104.10 area again. In the event that price breaks down below the 200-day EMA, it may seek further support at the 61.8% Fibonacci retracement level (from the January 2014 high of 105.45 to the October 2013 low of 96.55), which is around 100.00.

The Bank of Japan started its policy meeting this week. The BOJ has maintained the stimulus policy of buying about 7 trillion yen of government bonds per month since April 2013. Economists expect the central bank will keep its current policy unchanged. The BOJ Monetary Policy Meeting Minutes is scheduled for June 17.

Support levels below:
1st support: 200-day EMA
2nd support: 100.75 (May 21 low)
3rd support: 100.00 (61.8% Fibonacci retracement level)

Resistance levels above:
1st resistance: resistance confluence
2nd resistance: 103.75/104.10
3rd resistance: 104.80 (January 22 high)