USD/JPY: Bears testing Bulls commitments below 120 handle

FXStreet (Guatemala) - USD/JPY dropped through the 120 handle as markets get going in Tokyo, following the Fed's decision to stay on hold for the time being, painting a bearish picture for the Global economy and attracting risk-off flows into the Yen.

USD/JPY dropped from the cautious levels through the 200 DMA at 120.80 on the Fed's decision and fell to 120.25 and then to the lowest level of 119.78 where demand came in and took the Yen back down to 120.20 on a drift into early Asia. The BoJ minutes were released prior to the tepid/negative Asian open where many members said that they must be vigilant to the effect on Japan's economy if growth in emerging economies, including China, were to decelerate further.

USD/JPY neutral

There has been a strongly negative effect on the MACD on the hourly chart while the daily chart remains positive. Momentum to the downside has slowed and leave the major in neutral territory, but needs to regain the 120.80 level to alleviate downside pressures. 116.14 is the August low as a base target for the bears.