Awaiting a slide from the FOMC decision
The USDJPY is consolidating above and below the 100/200 hour moving averages in a narrow trading range as traders await the FOMC rate decision at 2 PM ET. The low to high trade varies only 29 pipes. That compares to a 22-day average (about a month of trading) of 66 pipes.
The moving averages of 100 and 200 hours almost converge at 113.85. The high price was reached in the Asian session right at the 114.00 level. The low was recently reached at 113.71, the current price bounced back to 113.85 just near the moving average levels again.
Taking a broader look back to October 13th (see red box). The price was in a range between 113.21 (which also happens to be the 38.2% rebound from the move up from the October low) and 114.69 (most of the price action was below 114,457).
The price over the longer period, has seen waves getting lower and lower, above and below the 100 and 200-hour moving averages while traders are considering the next move in the US dollar.
The US stocks moved up (the main indices are always highs), which tends to help the pair, but the price action in the pair did not follow that pattern.
In the U.S. debt market (another influence), the benchmark 10-year yield moved higher and back down during that time between 1.5% and 1.7%. The current yield is 1.544%. The up and down price action I assume supports the up and down price action in the USDJPY.
Overall, the longer revision along with today’s shorter view, has the price that neutral level. That suggests the market is waiting for what the Fed may or may not be doing. If the Fed is sharper, we should expect a run back to the highs. If the Fed is less sharp, the lower extremities would be targeted.
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