FxWirePro: USD/JPY sidelined ahead of Fed, BoJ policy meetings, extends range trade around 5-DMA

Chart - Courtesy Trading View 

USD/JPY was trading 0.10% higher on the day at 134.57 at around 04:30 GMT.

The pair is extending sideways around 5-DMA as markets remains cautious ahead of the Fed and BoJ policy meetings.

The Bank of Japan (BOJ) will continue with its prudent monetary policy despite the inflation rate above 2%.

On the other side, traders have raised their rate hike expectation from Fed to over 50 bps as U.S. inflation is at a galloping pace. The Fed is expected to raise its interest rates by 75 bps.

USD/JPY has formed back-to-back Doji formations on the daily candles, suggesting indecision to carry forward prices.

Technical indicators show bias is bullish. Oscillators are at overbought, but no signs of reversal seen.

Major Support Levels: 

S1: 132.56 (200H MA)

S2: 131.17 (21-EMA)

Major Resistance Levels: 

R1: 135

R2: 135.93 (Upper BB)

Summary: USD/JPY trades with a bullish bias. Fed policy decision has been priced in by the markets. Technical analysis still supports gains. Scope for re-test of 135 mark.