4 min readAs markets prepare for today’s FOMC decision, USD/JPY remains a key pair to watch. The FOMC not only impacts the US dollar directly but also influences yen sentiment, particularly as traders weigh interest rate differentials and broader risk appetite. Recent volatility in USD/JPY has been driven by shifting expectations around both Federal Reserve policy and potential Bank of Japan interventions, keeping traders alert.
From a technical perspective, USD/JPY has retraced a significant portion of its previous bullish move. While the local structure still maintains a series of higher lows and higher highs, recent price action suggests some weakening momentum. The pair has found support between 142 and 142.5, following a bounce around this level. However, the inability to hold above the 143.5 level has raised concerns about continued bullish strength.
If the current support zone between 142 and 142.5 breaks amid potential FOMC volatility, further downside could open toward the 141 area where recent local lows are found. This would mark a deeper retracement and could signal a shift in market sentiment.
On the flip side, a reclaim of the 143.5 area, marked as a key level on the chart, could renew bullish momentum. Such a move could potentially take USD/JPY back toward the last local high at approximately 145.5. It is also worth noting that the daily 50 EMA sits at around 146, adding technical confluence to that high time frame resistance area.
Traders should closely monitor these levels as the FOMC decision could act as a catalyst for a breakout or breakdown in the coming sessions.
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