USD/JPY very quiet before Fed's storm
|- Fed rate decision is coming very soon at 18.00 GMT. Get ready.
- USD/JPY technical compression seems unsustainable as one side will have to give in.
The USD/JPY is trading at around 106.30 down 0.20% so far as the FOMC rate decision is quickly approaching. The key question will revolve around how many times the Fed will hike; three or four times in 2018? Another equally important issue will be the impact of tax cuts on the economy.
After the Fed's rate decision, the FOMC will release its monetary policy’s statement which may provide additional volatility to the USD pairs.
USD/JPY daily chart
The USD/JPY is trading in yesterday's range ahead of the rate decision. The USD/JPY is in the middle of the 105.50-107.00 range. Both the RSI and MACD are showing a positive divergence, although the RSI is still below the 50 mark. A bullish breakout will see the bulls initially targetting the 107.00 psychological level, followed by the 107.60-108.00 area which was a previous supply zone, later followed by 109.00 which is the 38.2% Fibonacci retracement from the November 2017-March 2018 downtrend. On the flip side, if bears win, support is seen at the 104.00, 102.00 and 100.00 figures.
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