• All eyes are on the BoJ today as the price aligns with key technical structures.
• USD/JPY M-formation playing out and a downside impulse in play that targets the key support structures meeting the -272% and -61.8% Fibonacci brackets. 

USD/JPY is teed up for the Bank of Japan meeting later today and is correcting on the charts towards a critical area that the following will illustrate. In the prior analysis, there were prospects of a reversion into the M-formation\s bearish impulse on the prior leg:

USD/JPY prior analysis

USD/JPY H1 chart

We are seeing this correction get underway and bulls will now be looking for a bullish structure to lean against in aiming for a reversion of sorts as follows: 

As illustrated, the price was on the backside of the trend and a breakout to the upside had been gathering momentum after a test of the structure around 128.80. The 38.2% Fibonacci was a first target near 129.50 with 131.20's eyed thereafter. 

USD/JPY update

The bulls have fallen shy of the 38.2% Fibonacci so far and are headed for a bearish close on the day. However, while above 127.50/88, the bulls remain in playing what could be a phase of accumulation as per the hourly chart:

The following shows the price adhering to a textbook schematic with the M-formation playing out and a downside impulse in play that targets the key support structures meeting the -272% and -61.8% Fibonacci brackets. 

The support could prove critical in and around the BoJ event guarding 127.20.

 A break below here opens the risk of a significant downside extension: