FOMC Approaches. How Will USDJPY Respond?
20 September 2023
Hello traders. Diving deep into the technicalities, today’s spotlight is on the American dollar to Japanese yen. As we inch closer to the interest rate decision, ripples of volatility and intriguing movements are already surfacing, especially evident in today's trading dynamics.
During the initial trading hours, the American dollar to Japanese yen ascended, etching new long-term highs. This was evidenced as the price punctured the resistance level slightly below 148, setting new benchmarks for monthly highs. However, the currency pair's journey was not without twists. This ascent turned out to be a mirage - a false breakout denoted in blue on the charts. The reason? A swift reversal. By the time the market approached the latter half of the day, the price recoiled, sneaking below the orange resistance.
Compounding this narrative of caution, the pair is currently languishing below the green uptrend line. This line played a pivotal role in bolstering buyers throughout September. Should today’s trading curtain fall with the price nestled below this crucial juncture, it would resonate as a potent beacon to initiate short positions.
An important caveat to bear in mind is the imminent FOMC projection, statement, and the interest rate decision. The subsequent press conference promises to inject a dose of heightened volatility. The markets might sway with heightened fervor, so treading with caution is imperative.