As the clock ticks down to the FOMC rate decision at 2 PM ET, the USDJPY is perched right on key moving average support. That support is defined by the 100-day moving average at 146.175, and the pair is currently holding just above it. Buyers have leaned against the dip, perhaps taking profit from the recent selloff at this technically important level.
Still, the Fed’s decision — along with the dot plot, economic projections for inflation, GDP, and employment, the policy vote, and Chair Powell’s press conference — will determine whether this support holds or breaks.
A dovish outcome, with yields moving lower, would likely trigger a break of the 100-day moving average, exposing the 50% midpoint of the trading range since late December/early January 2022–2023 and the 2024 high, which comes in at 144.581.
On the flip side, a more hawkish tone would have traders looking for a rebound back toward resistance at the 200-day moving average near 148.68, keeping buyers in control.
Needless to say, with so much uncertainty, the news will dictate the market’s reaction. The pair is trading near the lowest levels of the past three months and sitting right against the 100-day moving average, giving sellers the upper hand as they lean on expectations for a more accommodative Fed. Whether that view is fully priced in remains uncertain — but for now, the bias tilts in favor of the downside.
This article was written by Greg Michalowski at investinglive.com.