FxWirePro- Currency Strength Index (4- Hour chart)- Currency pairs to watch (GBPAUD and GBPJPY) for the day)
FxWirePro: USD/JPY pauses downside at daily cloud, Fed Policy Decision Looms
Chart - Courtesy Trading View
USD/JPY was trading 0.22% higher on the day at 113.91 at around 04:50 GMT.
The pair has snapped at 4-day bearish streak and has edged higher as investors brace for the U.S. Federal Reserve’s latest policy decision.
The Fed will decide policy on Wednesday and is widely expected to tighten monetary policy at a faster pace than expected to curb the continuously high inflation.
Further, concerns over inflation which is now viewed as the biggest threat to the U.S. economy and geopolitical tensions in Eastern Europe keep upside limited.
Technical bias for the pair remains bearish. Price action has slipped below 55-EMA, momentum is bearish and volatility is high.
The pair is currently holding support at daily cloud and weakness only on break below. Next major support lies at 110-EMA at 113.13.
Major Support Levels:
S1: 113.51 (Cloud base)
S2: 113.13 (110-EMA)
Major Resistance Levels:
R2: 114.11 (converged 55-EMA and 5-DMA)
R3: 114.48 (21-EMA)
Summary: USD/JPY trades with a bearish technical bias. Watch of for bounce off cloud support for near-term trend reversal.