- The dollar is weak on the day of the Federal Reserve’s decision.
- The yen with mixed results, without major changes.
- USD/JPY stalls recovery at major resistance.
USD/JPY is falling on Wednesday before the decision of the Federal Reserve. The pair hit highs since Friday above 137.00 hours ago, but then reversed direction and fell to the 136.50 area, close to where it is trading.
Lots of data, but the Fed dominates
In the US, data on orders for durable goods, foreign trade, the index of leading indicators and the report on pending home sales will be published, but the focus is on the decision of the Federal Reserve. A rise of 75 basis points is expected.
The Fed will apply a new measure to curb inflation, in a context of growing signs that a recession is coming. This implies a great challenge and leads the markets to expect low interest rates next year. The meeting will be the key event of the day and can have a lasting impact.
In the previous, the treasury bond yields They show no significant changes and Wall Street futures are trading at a profit.
technical landscape
The USD/JPY reaches a key day in the recovery process after the sharp drop last Friday. The rallies still look vulnerable, with the price remaining below the 20-day moving average.
The bullish rally found resistance at the 137.00 area for now. On the downside around 136.50 a short-term bullish line appears, which if it gives way would leave the dollar weakened. In any case, the change of direction (in any direction) is expected from the Fed meeting.
AConfirmation below 136.00 would leave USD/JPY heading lower. In the opposite direction, above 137.00, 137.60 appears as a key area, where a close above could give the dollar strength again, and would imply a firm return above a key level and the 20-day moving average.
Technical levels
Source: Fx Street
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