USD/JPY consolidates around 110.00, awaits Fed for next direction

The USD/JPY pair is seen consolidating the overnight recovery around 110 handle, as the bulls turn cautious ahead of the FOMC meeting, which commences later today.

USD/JPY capped by 5 & 10-DMA confluence

The bulls took a breather after having regained 110 handle, as sellers lurked at 110.12 levels, confluence zone of 5 & 10-DMA, restricting further upside,

Moreover, subdued trading activity seen around the US treasury yields capped the recovery in the greenback versus its main competitors, which in turn kept a lid on the gains in USD/JPY.

However, sentiment remains underpinned around the spot, as a Fed rate hike is already priced-in by markets, while the BOJ rebuffing speculation that it was engaging in "stealth tapering" kept the JPY bulls on the side-lines.

All eyes now remain on the FOMC decision due to be announced tomorrow. In the meantime, the US inflation figures will keep the traders busy.

USD/JPY Technical levels                 

Omkar Godbole, Analyst at FXStreet offers technical levels for the spot: “Support - 109.57 (0.618 of May 11 high - May 18 low - May 24 high), 109.11 (June 7 low), 109.10 (weekly 50-MA), 108.13 (April low) Resistance 110.44 (weekly high), 110.66 (resistance offered by the trend line from Dec high and Mar high), 110.82 (weekly 200-MA + weekly 10-MA + June 9 high), 111.04 (50-DMA), 111.71 (June 2 high).”