USD/JPY faces hurdles around 135.60 as DXY turns sideways, the spotlight is on Fed

USD/JPY has failed to extend its upside above 135.60 as DXY is consolidating ahead of Fed’s policy.
Higher price pressures are advocating a rate hike of 75 bps by the Fed.
The BOJ is expected to stand with its prudent monetary policy to accelerate aggregate demand.

Sagar Dua FXStreet

The USD/JPY pair has slipped below 135.30 after facing barricades around 135.60. On a broader note, the asset has remained in the grip of bulls therefore minor exhaustion doesn’t resemble a bearish reversal. It won’t be early to state that the asset is heading for a fresh new high ahead of the interest rate policy by the Federal Reserve (Fed).

The Fed is expected to dictate a rate hike by 75 basis points (bps). Fed chair Jerome Powell in his previous testimonies stated that a rate hike by 75 bps is not into consideration, which doesn’t rule out the odds of a 75 bps rate hike this time. The inflation situation has much worsened now as the annual figure has climbed to 8.6%, thanks to the advancing oil and food prices. To fix the inflation mess, the Fed will tighten its policy further and will elevate interest rates aggressively.

Meanwhile, the US dollar index (DXY) has turned sideways ahead of Fed’s policy and is expected to display a lackluster performance going forward. The DXY is hovering around 105.50 after registering a fresh 19-year high at 105.65.

On the Tokyo front, investors are awaiting the interest rate policy by the Bank of Japan (BOJ), which is due on Friday. The BOJ is expected to continue with its prudent monetary policy to keep flushing liquidity into the economy. The inflation rate in Japan has reached to its target but is majorly contributed by higher oil prices rather than a broad-based demand recovery.

USD/JPY

Overview
Today last price	135.42
Today Daily Change	1.00
Today Daily Change %	0.74
Today daily open	134.42

Trends
Daily SMA20	129.93
Daily SMA50	128.71
Daily SMA100	122.89
Daily SMA200	118.08

Levels
Previous Daily High	135.2
Previous Daily Low	133.59
Previous Weekly High	134.56
Previous Weekly Low	130.43
Previous Monthly High	131.35
Previous Monthly Low	126.36
Daily Fibonacci 38.2%	134.59
Daily Fibonacci 61.8%	134.21
Daily Pivot Point S1	133.61
Daily Pivot Point S2	132.8
Daily Pivot Point S3	132
Daily Pivot Point R1	135.22
Daily Pivot Point R2	136.01
Daily Pivot Point R3	136.83

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

AUD/USD eyes 100-SMA hurdle near 0.7035 as hawkish RBA counters firmer USD

AUD/USD regains positive traction on Tuesday and climbs to 0.7030 during the Asian session, reversing the previous day's corrective slide from a one-month high as hawkish RBA rate expectations continue to support the Aussie. Spot prices, however, remain below the 100-day SMA pivotal resistance amid a firmer US Dollar as traders brace for Australia’s September CPI report on Wednesday ahead of the Fed rate decision.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold sticks to intraday losses around $4,000 as USD stays firm ahead of FOMC

Gold maintains its offered tone through the first half of Tuesday’s European session, with bearish traders looking to extend the slide further below the $4,000 psychological mark amid a broadly firmer US Dollar. The precious metal, however, holds above the three-month low touched on Monday, as traders refrain from placing aggressive directional bets and opt to wait for the outcome of the two-day FOMC policy meeting on Wednesday.

Pi Network stalls as weak crypto sentiment caps recovery

Pi Network (PI) holds steady above $0.0760 at press time on Tuesday, stalling after a roughly 2% rebound the previous day. The broader market's weak sentiment and reduced trading volume weigh on the PI token. The technical outlook is bearish, with price capped below a long-term resistance trendline and weak momentum.

France tests the Euro's nerve: What the OAT spread is telling FX traders

France's 10-year borrowing premium over Germany hit its widest since the 2011 debt crisis last week. With public spending above 57% of GDP, unrest on the streets and a presidential election next spring, cuts look unlikely. If Paris cannot trim, the bill may be paid quietly through financial repression.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.