FxWirePro: USD/JPY rangebound within daily cloud, cautious sentiment prevails ahead of the FOMC verdict

USD/JPY chart - Trading View 

Spot Analysis:

USD/JPY was trading in tight ranges at around 109.81 at 06:20 GMT.

Previous Week's High/ Low: 110.59/ 109.06

Previous Session's High/ Low: 110.38/ 109.58

Fundamental Overview:

Pre-Fed trading lull keeps the price action in the pair subdued.

The Federal Reserve is likely to maintain its cautious tone amid rising covid cases. 

Focus will be on how Fed Chair Jerome Powell will manage to defend the easy-money policies.

Technical Analysis:

- Price action has slipped back into the daily cloud

- The pair is trading below 200H MA and recovery remains capped below 55-EMA

- GMMA indicator shows bearish shift on intraday charts

- MACD has slipped below zero and -ve DMI dominance adds to the downside bias

Major Support and Resistance Levels:

Support - 109.51 (23.6% Fib), Resistance - 110.04 (200H MA)

Summary: Pre-Fed trading lull to keep the pair subdued. Breach below 23.6% Fib is likely to drag the pair lower to test cloud base support at 109.15. Next major support lies at 110-EMA at 109.06. Bounce off cloud negates any further weakness.