FxWirePro: USD/JPY fails at 21-EMA, dollar under pressure ahead of Fed policy meet

USD/JPY chart - Trading View 

Fundamental Analysis:

USD/JPY was trading 0.10% lower on the day at 103.54 at around 03:55 GMT, extending previous session's 0.35% fall.

Progress in vaccine rollouts keep hopes of a swift economic revival, while investors keep a close watch on stimulus talks and the Federal Reserve's policy statement due later in the day.

The U.S. Federal Reserve is largely expected to keep interest rates pinned near zero. Focus shall be on the Fed's policy statement is due at 1900 GMT for forward guidance.

Traders will watch for clues on where rates are headed in the coming years and how long the Fed will keep up its massive bond-buying program.

Technical Analysis:

The pair was rejected at 21-EMA resistance and looks set to extend weakness as major bias remains bearish.

Price action is below major moving averages, volatility is rising as evidenced by widening Bollinger bands.

Recovery attempts capped at 200H MA and hourly cloud. Momentum strongly bearish as Stochs and RSI are sharply lower.

Data Watch:

1330  GMT U.S. Nov Retail Sales 

1445  GMT U.S Dec Flash Services PMI

1445  GMT U.S Dec Flash Manufacturing PMI      

1900  GMT U.S. FOMC policy statement

Support levels - 103.50 (Trendline), 103.17 (Nov 6 low), 101.75 (Major trendline)

Resistance levels - 103.88 (5-DMA), 104.05 (200H MA), 104.11 (21-EMA)

Summary: Technical bias for the pair is strongly bearish. Watch for clues from FOMC meeting and macroeconomic data later today. Immediate support lies at 103.50. Breach below will drag prices lower. Scope for test of 103.17 (Nov 6th low).