FxWirePro: USD/JPY extends weakness ahead of FOMC meet, on verge of 'Symmetric Triangle' breach, intraday bias bearish

USD/JPY chart on Trading View used for analysis

• USD/JPY extends overnight slump, trades 0.45% lower at 112.31 at the time of writing.
   
• The pair in on verge of breach at 'Symmetric Triangle' base, on expectations of a dovish Fed.
   
• Rising speculations that the Fed will signal a pause to its monetary tightening cycle at this week's meeting weighing on the USD.
   
• Also, risk-off in markets leading to global flight to safety underpinning JPY and adds to the downward momentum.
   
• The Fed funds rate futures continued to price the chance of a rate hike this week around 75% with a March 2019 rate hike given a 30% chance.
   
• Analysts at Danske Bank expect that the Fed will probably remove more of its forward guidance to increase its flexibility.
   
• There is likely to be an emphasis on a data dependent and risk management approach and we expect a muted reaction.
   
• The Bank of Japan policy meet is scheduled for Thursday, 20th Dec and will likely be a non-event.
   
• Immediate support is seen at 23.6% Fib at 112.20, while immediate resistance is seen at 112.97 (50-DMA).

Support levels - 112.20 (23.6% Fib), 111.37 (Oct 26 low), 110.76 (38.2% Fib)

Resistance levels - 112.97 (50-DMA), 113.11 (21-EMA), 113.70 (Dec 13 high), 113.85 (major trendline)

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.