FX.co ★ USD/JPY needs strong support from FOMC

The USD/JPY pair dropped again and it is challenging the near-term support levels again. In the short term, it seems undecided, so it could resume its range pattern. It's located at 130.03 far below yesterday's high of 130.56.

Fundamentally, the Japanese economic data came in mixed in the early morning. Retail Sales, Prelim Industrial Production, and Consumer Confidence came in better than expected. In addition, the Unemployment Rate came in line with expectations while Housing Starts reported poor data.

Earlier today, the US data brought high volatility. The CB Consumer Confidence and Chicago PMI came in worse than expected. Still, the traders are waiting for the FOMC as this is seen as a major event tomorrow. The Fed should increase the Federal Funds Rate by 25 bps. Also, ADP Non-Farm Employment Change, ISM Manufacturing PMI, and JOLTS Job Openings represent high-impact events as well. The indicators are expected to come in worse compared to the previous reporting period.

USD/JPY Extends Its Range!

The USD/JPY pair continues to move sideways. You knew from my previous analysis that the rate could jump higher as long as the pair stays above the outside sliding line (sl) of the ascending pitchfork.

It's still trapped between 129.49 and 130.61 levels. It escaped from the triangle pattern and the rate came back to test and retest the broken downtrend line.

USD/JPY Outlook!

The rate failed to reach the 130.61 former high (range's resistance). It remains to see how it will react after reaching this static resistance.

Jumping, closing, and stabilizing above 130.61 activates further growth and is seen as a buying opportunity. The next major target could be represented by the 132.00 psychological level.