FxWirePro: USD/JPY rangebound ahead of key FOMC policy meet

Chart - Courtesy Trading View 

Spot Analysis:

USD/JPY was trading 0.04% higher on the day at 118.24 at around 06:55 GMT

Previous Week's High/ Low: 118.45/ 114.81

Previous Session's High/ Low: 118.45/ 117.69

Fundamental Overview:

Rising uncertainty over the monetary policy announcement by the Federal Reserve (Fed) later on Wednesday keeping investors wary.

Spiraling inflation calls for the Fed to shoot up the interest rates. However, Russia-Ukraine crisis and the intensifying fears of stagflation will make it a close call.

The Fed will likely choose a 25 bps rate hike and a ‘wait and watch approach for the monetary policies later this year.

Focus also on the Bank of Japan (BOJ) monetary policy on Friday where the central bank is likely to keep the status unchanged.

Technical Analysis:

- USD/JPY has paused a 7-day bullish streak

- GMMA indicator shows major and minor trend are bullish

- Oscillators are at overbought, raising scope for pullback

- Major moving averages are trending higher

Major Support and Resistance Levels:

Support - 117.62 (5-DMA), Resistance - 118.62 (Dec 2016 high)

Summary: USD/JPY looks stretched, minor pullback on cards. Major trend however remains bullish, pullbacks are likely to be shallow. Resumption of upside will see test of 120 levels.