The pair did fall to a low of 101.33, however it has come back into favour, with traders happy to buy the dip in the hope of more stimulus from the BoJ in July.
Momentum is behind the trade right now, so traders are likely to move stops on the trade to break-even (101.90). A break of 102.73 (the 50% retracement of the April sell-off) is needed for the pair to rally to 103.00.
Fundamentally, it’s hard to see significant upside for the pair in the short term, unless we get a real sense of further easing from the BoJ, especially with the Fed pushing back on rate hike expectations of late. There don’t seem a lot of short-term drivers, with US data fairly light this week and Japanese CPI (traders will focus on the Tokyo print) on Friday likely to be pushed up predominantly on factors derived from the April 1 sales tax hike.