The pair is slightly higher in early European trading, following sharp fall to 112.50 in Asia, as Bank of Japan trimmed the amount of its bond purchases.
Market saw the announcement from BoJ as initial signal of possible complete withdrawal of the stimulus, despite BoJ Governor Kuroda’s repeated dismissals of such scenario, sending the dollar sharply lower.
Fresh weakness penetrated daily cloud (cloud top at 112.78 was strong support) on spike to 112.50, with subsequent bounce still unable to return above the cloud, keeping near-term bias negative.
Doji reversal pattern that formed on daily chart adds on downside pressure.
While the price holds in the cloud, fresh attempts lower could be anticipated.
Daily cloud base marks strong support at 112.32, followed by 100SMA at 112.13. Daily techs softened on fresh weakness and support negative scenario.
Conversely, return and close above cloud top would sideline immediate bearish threats.
Res: 112.95, 113.17, 113.38, 113.63
Sup: 112.72, 112.50, 112.32, 112.13
