USD/JPY struggles near 7-week lows, below mid-112.00s ahead of FOMC
• Persistent USD selling keeps exerting pressure for the fourth straight session.
• Fed rate hike uncertainty continues to dent sentiment around the greenback.
• Monetary policy updates by the FOMC and BoJ to determine the near-term trajectory.
The USD/JPY pair now seems to have entered a bearish consolidation phase and was seen oscillating in a narrow trading band, just above seven-week lows touched earlier.
The pair extended last week's retracement slide from levels beyond mid-113.00s and kept losing ground for the fourth consecutive session in wake of a strong follow-through selling around the US Dollar.
The greenback remained on the back-foot through the mid-European session on Wednesday, hovering near a one-week low amid expectations that the Fed may slow, or even halt its rate hike cycle in 2019.
However, the prevalent risk-off mood, as depicted by strong gains across European equity markets, dented the Japanese Yen's relative safe-haven status and helped limit deeper losses.
Adding to this, traders might also be reluctant to place any aggressive bets and prefer to wait for the release of the Fed's new forecasts for economic growth and interest rates, known as the "dot-plot".
Apart from the latest FOMC decision, the latest BoJ monetary policy update, due to be announced during the Asian session on Thursday, will help determine the pair's next leg of a directional move.
Technical levels to watch
Today Last Price: 112.34
Today Daily change: -22 pips
Today Daily change %: -0.195%
Today Daily Open: 112.56
Previous Daily SMA20: 113.2
Previous Daily SMA50: 112.98
Previous Daily SMA100: 112.4
Previous Daily SMA200: 110.82
Previous Daily High: 112.86
Previous Daily Low: 112.25
Previous Weekly High: 113.71
Previous Weekly Low: 112.24
Previous Monthly High: 114.25
Previous Monthly Low: 112.3
Previous Daily Fibonacci 38.2%: 112.48
Previous Daily Fibonacci 61.8%: 112.63
Previous Daily Pivot Point S1: 112.25
Previous Daily Pivot Point S2: 111.94
Previous Daily Pivot Point S3: 111.63
Previous Daily Pivot Point R1: 112.87
Previous Daily Pivot Point R2: 113.18
Previous Daily Pivot Point R3: 113.49