FxWirePro: USD/JPY trades in tight range ahead of event risks

• USD/JPY traded in narrow range  on Wednesday as traders stayed cautious ahead of the Federal Reserve’s crucial interest-rate decision later in the day, with attention focused on the policy statement and subsequent press conference for clues on the path of rates

• Markets are pricing in around a 92% probability of a 25-basis-point Fed rate hike, reflecting expectations that persistent inflation pressures will prompt policymakers to maintain a relatively hawkish stance

• Much of the expected Fed tightening appears to be reflected in current market pricing, potentially limiting further upside for the U.S. dollar unless the FOMC delivers a more hawkish outlook on future rate increases.

•Meanwhile,  Bank of Japan is also expected to raise interest rates to a 31-year high on Friday and signal further increases in borrowing costs, joining other major central banks in tackling persistent inflation pressures fueled by surging oil prices.

• Immediate resistance is located at 155.66 (38.2%fib), any close above will push the pair towards 157.05(SMA 20).

•  Support is seen at 154.26(Sep 15th low) and break below could take the pair towards 153.15(23.6%fib)

Recommendation: Be on sidelines