The USD/JPY shed gains during last weeks trading session forming a resistance at 121.830 as the market seems to be over-bought . Weekly bias remains slightly on the downside in the medium term picture as 21 and 55 Exponential Moving Average are freshly crossed downward on the 4 hours charts.
Am expecting more decline of price in the pair to 114.300 psychological support if price breaks 117.43 support successfully. The 114.130 supports lies on the 55 EMA on the daily charts so this should be the 1st realistic target. Price action patterns would be monitored closely on the 114.130 supports should in case there is a bounce of price on such support, which could resume the rally in the pair.
However, on the upside a break of 121.830 resistance will resume the bullish trend in the broader picture to 124.130 resistance, as the current minor sell off could be regarded as a wave correction of the rally. A successful break of 124.130 will bring further rise to 135.190 resistance.
The fate of the USD/JPY pair in this week’s trading session would be decided by the FEDS on Wednesday as investors would be taking close look at the United States Interest Rate Statement and the FOMC Economic Projections. Investors will be awaiting the outcome of the Federal Reserve policy meeting for further clarification on when interest rates might start to rise.
The Bank of Japan is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The bank will hold a press conference following the announcement.