USD/JPY consolidates in a range near multi-week tops, FOMC awaited

The USD/JPY pair lacked any firm directional bias and remained confined in a narrow trading band, comfortably above the 108.00 handle, through the early European session on Wednesday.
 
After the previous session's intraday pullback from multi-week tops, the pair managed to regain some positive traction on Wednesday. The overnight comments by Saudi Arabia's energy minister, saying that the kingdom has tapped inventories to restore oil supplies, helped lift the global risk sentiment and dented the Japanese Yen's safe-haven demand.

Focus remains on FOMC decision

Bullish traders seemed unaffected by Wednesday's release of slightly better-than-expected Japanese August month trade data, rather took cues from a modest pickup in the US Dollar demand, though lacked any strong conviction and refrain from placing aggressive bets as the focus remains firmly on the highly anticipated FOMC monetary policy decision.
 
The Fed is widely expected to cut interest rates by another 25 bps at the conclusion of a two-day monetary policy meeting this Wednesday and the move is largely priced in the market. Hence, investors will closely scrutinize the accompanying policy statement and updated economic projection for fresh clues over the central bank's near-term monetary policy outlook.
 
This will be followed by the post-meeting press conference, where the Fed Chair Jerome Powell's comments will play a key role in determining the pair's next leg of a directional move. Meanwhile, any knee-jerk slide is more likely to be used as a buying opportunity amid the recent encouraging US-China trade developments.

Technical levels to watch