USD/JPY Structure into FOMC
The BoJ rate decision may carry more potential for the USD/JPY pair on this go-round but there's some clean structure in-place ahead of the Fed meeting, where the bank is widely expected to hike for the first time in three years. The 155.00 level has so far been support all morning, and the prior swing-low turned resistance at 155.50 has been resistance. Below, it's the 153.00 level that's vital especially as we go into later-week trade with that BoJ meeting high on the calendar. If that breaches, larger fears of big picture carry unwind can compel a stronger bearish move. On the long side, carry is still positive but the bigger question is for how long trends might run. After the intervention at 164, bulls started to get more and more bold until eventually we saw the sell-off from 160.00. This can theoretically cap upside it's just that right now the only clear line-in-the-sand is 160 so the bigger question is how Bessent or the BoJ might respond to a 157 or 158, but it does feel risky going for that, at this point, and if that's clear, it can become a more widespread item as we go into some heavy event risk in the second-half of the week. - JS
- neutral toward USD · 95%
