By Fast Brokers – The USD/JPY is consolidating just below its highly psychological 90 level as investors await the Fed’s monetary policy decision this afternoon EST. Today’s U.S. econ data printed about in line with analyst expectations while EU PMI and UK CCC data points outperformed. However, besides considerable strength in the Pound today, the major Dollar pairs are moving sideways as investors anticipate the Fed. That being said, investors have priced in a more hawkish Fed over the past couple weeks due to impressive U.S. employment and consumption data. However, should the Fed downplay the recent performance of these positive data points and maintain its full commitment to a loose monetary policy then we may witness a pop in the risk trade, a negative catalyst for the USD/JPY. On the other hand, should the Fed actually make its stance a little tighter then the FX markets could experience another wave of Dollar buying, likely a positive development for the USD/JPY. Either way, the FX markets could be in for a bit of volatility over the next 24 hours as investors digest the Fed’s decision. Meanwhile, the Japanese wire will remain quiet until Friday’s BoJ Press Conference, meaning the USD/JPY’s performance should follow the path of the Dollar for the time being.
Technically speaking, the USD/JPY is battling with the highly psychological 90 area once again, a worthy topside foe. Furthermore, the USD/JPY faces multiple downtrend lines along with previous December highs. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with 12/14 and 12/09 lows.
Present Price: 89.74
Resistances: 89.78, 89.89, 90.01, 90.25, 90.39, 90.58
Supports: 89.35, 89.14, 88.99, 88.77, 88.60, 88.34
Psychological: 90, December Highs and Lows
Market Commentary provided by Fast Brokers.
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