FxWirePro: USD/JPY rangebound, capped below daily cloud, focus on FOMC meeting

• USD/JPY is trading in a narrow range, ahead of key FOMC and BoJ policy meetings.
   
• The Bank of Japan (BoJ) is widely expected to maintain its policy stance unchanged at its meeting ending on Sept 21st, including its ‘QQE with yield curve control.
   
• The Fed is expected to announce its intention to start unwinding its balance sheet.
   
• The Fed fund futures yields continued to price the chance of a December rate hike at 56%.
   
• The major is extending consolidation around the midpoint of the 111 handle.
   
• Cloud offers stiff resistance at 111.60, break above needed for further upside.
   
• Technically, the major has broken above 100-DMA at 111.13 and is on track to test 200-DMA at 112.21.
   
• Momentum studies are bullish and bullish divergence keeps scope for upside.

Support levels - 111.13 (5-DMA), 110.35 (50-DMA), 109.89 (20-DMA)

Resistance levels - 111.60 (cloud top), 111.75 (61.8% Fib retrace of 114.49 to 107.31 fall), 112.21 (200-DMA)

Recommendation: Wait for clear directional bias.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -115.202 (Bullish), while Hourly JPY Spot Index was at -104.293 (Bearish) at 0345 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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