Forex: USD/JPY heading for retest of 93.50/55, Nikkei up 1.5%

FXstreet.com (Barcelona) - USD/JPY has fully recovered the bid tone ahead of the first BoJ policy decision by Mr. Kuroda tomorrow in Asia, having printed a bullish pin bar rejection off demand-sensitive area between 92.40/92.75.

Yesterday's price activity saw the Yen fake longs the currency near highs, with the FXstreet.com team noting,prior to the pair's recovery back above 93.00, that a potential bear trap was in the making.

With the pair now stable around 93.30/35, and the Nikkei 225 opening with gains of 1.5%, the outlook for the pair in the Asian session is for continuous pressure towards former March low at 93.50. Next supply is not seen until 93.80 though, as per drop-base-drop from April 1, which was already tested once before the ephemeral collapse in prices.

In a piece published earlier, Societe Generale FX strategist Kit Juckes notes that "there is plenty of talk about yen short-covering, yet CFTC data suggest there are still yen shorts" he says

Mr. Juckes adds: "I suspect the 'big players' are square. But if you are on the sidelines, I'd be tempted to wait for the BOJ to reveal whatever bazooka is hidden under that kimono before loading up on yen shorts again."