FxWirePro: USD/JPY comatose at 21-EMA support, Fed policy eyed for impetus

Chart - Courtesy Trading View 

USD/JPY was trading largely unchanged at 136.87 at around 06:30 GMT, bias remains neutral.

Focus now on the FOMC policy meeting. Markets have already priced in a  75 basis points (bps) rate hike by the Federal Reserve (Fed). 

Also, growing odds for a slowdown in the US economy will likely force Fed chair Jerome Powell to drop the option of a 1% rate hike announcement.

Hopes of positive solution from Thursday’s talks between Biden and Xi trigger cautious optimism ahead of Fed, keeping US dollar demand in check.

Data Released:

US CB Consumer Confidence fell for a third consecutive month in July, to 95.7 from 98.4 prior. 

Further, the US New Home Sales dropped to 0.59M for June versus 0.66M expected and 0.642M previous readout. 

US Richmond Fed Manufacturing Index rose to the highest level since April, to 0 from -13 expected and -9 prior (revised up from -11).

Data Watch: 

Looking forward, the US Durable Goods Orders for June, -0.4% forecast compared to 0.8% prior.

US Pending Home Sales (MoM) for June scheduled at 1400 GMT, -1.5% forecast compared to 0.7% prior. 

Major attention will be given to the Fed’s policy decision and Chairman Jerome Powell’s press conference.

Major Support and Resistance Levels:

Support levels - 136.62 (21-EMA), 134.75 (Lower BB)

Resistance levels - 137.61 (200H MA), 139.00 (Upper BB)

Summary: USD/JPY major trend remains bullish, while minor trend has turned neutral. 21-EMA is strong support at 136.62, weakness only on break below.