Positioning for post FOMC move?
The USDJPY broke back above the 100 day MA in NY trading yesterday (100 day is at 111.602 today), and moved to the next target area defined by a series of 200 bar MAs. The 200 hour MA, the 200 bar MA on the 4-hour chart, and the 200 day MA came in at 111.95 to 112.04 in the Asian session. The high in the session stalled at 112.08. PS the 38.2% of the move down from the July 11th high comes in at 112.097. That too is in the resistance area.
Currently, the 200 hour MA is lower at 111.875 and the price has been stalling against that line in trading since the high.
On the downside, the 100 day MA and 100 hour MAs at 111.602 and 111.469 are the targets to get back to and through for the sellers.
The price seems to be positioning between support and resistance for a post-FOMC momentum move. No change is expected, but the devil will be in the details as usual (will the Fed get more specific at QE taper/tightening plans and how do they characterize the economy since the last meeting?).
How that is interpreted will help determine if the 38.2% correction is it )at 112.097), and we head back below the 100 day MA at 111.60 and the 100 hour MA at 111.469 on the way to 111.07 (broken trend line) and the lows from the week,
OR
Do we move higher and take out the MAs and retracement levels at the 111.99-112.097 area and move toward the July 20 high at 112.414 and the 50% retracement at 112.55.
Lot's of times before a key release or event, the price settles between a support and resistance level/area. The USDJPY is doing just that. The FOMC decision/statement and market interpretation of what they say (that can be fickle), will help to define the next move. Right now, the sellers are trying to keep control (as long as the pair is below the 200 day MA you have to give the bias to the sellers), but the move back above the 100 day MA, is a technical counter weight in the favor of the bulls.
We will see how the cards fall post-FOMC.