USD/JPY Price Analysis: Keeps the red below 110.00 mark, focus remains on FOMC


  • USD/JPY witnessed some selling on Wednesday and moved away from over one week tops.
  • The formation of a symmetrical triangle points to indecision over the near-term trajectory.

The USD/JPY pair extended its steady intraday retracement slide from one-and-half-week tops and continued losing ground through the early North American session. The pair refreshed daily lows in the last hour and was last seen hovering around the 109.85-80 region, down 0.20% for the day.

Investors turned nervous ahead of the highly-anticipated FOMC policy decision. This was evident from a generally softer tone surrounding the equity markets, which, in turn, benefitted the safe-haven Japanese yen. Bearish traders further took cues from a modest downtick in the US Treasury bond yields and a subdued US dollar demand.

From a technical perspective, the recent bounce from the 109.20-15 confluence support stalled near a descending trend-line extending from YTD tops touched in March. This, along with another ascending trend-line, constitutes the formation of a symmetrical triangle and points to indecision over the USD/JPY pair's next leg of a directional move.

Meanwhile, technical indicators on the daily chart are holding comfortably in the positive territory and support prospects for an eventual breakout to the upside. That said, it will still be prudent to wait for a convincing break through the triangle hurdle, around the 110.15-20 region before positioning for any further appreciating move.

The USD/JPY pair might then surpass the monthly swing highs, around the 110.30-35 region and accelerate the momentum back towards the 111.00 neighbourhood.

On the flip side, immediate support is pegged near the 109.65 region, below which bears are likely to challenge the 109.20 support area. The mentioned region marks the lower boundary of the symmetrical triangle and is closely followed by the 50-day SMA around the 109.00 mark. A convincing break below will negate any near-term positive move.

The next relevant support is pegged near the 108.70 horizontal level, below which bearish traders could push the USD/JPY pair further towards sub-108.00 levels in the near term.

USD/JPY daily chart

fxsoriginal

Technical levels to watch

USD/JPY

Overview
Today last price 109.9
Today Daily Change -0.17
Today Daily Change % -0.15
Today daily open 110.07
 
Trends
Daily SMA20 109.46
Daily SMA50 109.12
Daily SMA100 108.18
Daily SMA200 106.32
 
Levels
Previous Daily High 110.17
Previous Daily Low 109.99
Previous Weekly High 109.84
Previous Weekly Low 109.19
Previous Monthly High 110.2
Previous Monthly Low 108.34
Daily Fibonacci 38.2% 110.1
Daily Fibonacci 61.8% 110.06
Daily Pivot Point S1 109.98
Daily Pivot Point S2 109.9
Daily Pivot Point S3 109.81
Daily Pivot Point R1 110.16
Daily Pivot Point R2 110.25
Daily Pivot Point R3 110.34

 

 

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