Economic Calendar
This week, the top event of the week will be the announcement of the US Federal Reserve Federal Funds Rate at 18:00 GMT. The Fed is expected to hike its base interest rate from 5.00% up to 5.25%. A larger increase or no increase at all would cause a sharp adjustment of the value of the US Dollar. Subsequently all of financial markets would be impacted. Meanwhile, note that the Fed has stated that rate cuts are not going to happen in 2023.
The rate publication is scheduled to be followed by the Press Conference of the Chairman of the Federal Reserve Jerome Powell at 18:30 GMT. In most cases, comments made by the head of the central bank cause more volatility than the rate announcement. Sometimes, the comments of Powell reverse the direction of the USD.
In regards to the Fed decision, note that the head of the central bank has commented in the past that they monitor the PCE Core Inflation data. On Friday, the data set revealed that month on month the personal consumption expenditures increased by 0.3%.
Hourly Chart
In the case of a strengthening of the USD, the rate could be slowed down by the 138.00 and 138.50 levels, before testing the weekly R2 simple pivot point at 138.82 and the 139.00 level.
However, a decline of the US Dollar against the Yen could find support in the combination of the 50-hour SMA and the 137.00 mark. Further below, note the 136.50 and 136.00 levels.
USD/JPY daily chart's review
On the daily candle chart, the pair has passed above the resistance of the 200-day simple moving average. The moving average acted as resistance in early March and caused a major decline during that month.The rate could be stopped by the 138.20/139.40 range.
Daily chart
On Monday, on the Swiss Foreign Exchange, traders were 74% bearish, as that amount of open position volume was in short positions.
Meanwhile, trader set up pending orders in the 100-pip range around the rate were 68% to buy the USD against the JPY.
On Tuesday, the positions were 73% short and orders were 61% to buy.