Today, the sideways trend on the USDJPY will end
01 February 2023
Today is FED’s day, so a crucial time for stocks and the USD. American Dollar awaits this event inside of a very boring sideways trend, which started in the middle of January and lasts already more than 2 weeks. This sideways move will for sure end today, as movements after the FED are usually volatile and we do not have a lot of space inside of the current sideways trend, so the breakout has to happen.
USDJPY awaits the FED’s decision inside of a pennant formation (red) and a channel-down pattern (black). Both of those formations promote the breakout to the downside. Another bearish factor here is the price being still below the 131 resistance (orange), which is the key level in the past few months. If there was no FED today, further drop, from the technical point of view, would be almost inevitable.
But Wednesday is a FED day, so literally, everything can happen, especially since traders have huge expectations about this one. Many analysts expect a pivot, which would mean a shift towards a dovish stance, which in theory would mean a weaker USD. As always, we are about to find out. What can we say for now is that the price closing a day above the orange area would be a nice buy signal and the price closing a day close to the yearly lows would be a signal to sell.