USD/JPY - USD/JPY Awaits Fed's Decision Later Today - 12/14/2016 (GMT)

The USD/JPY pair has traded sideways over the last couple of days as it is awaiting the outcome of today’s FOMC meeting. Early on Monday, the pair hit a fresh eight-month high and surpassed the strong psychological level at 116.00 challenging the 116.12 resistance level. After the rebound on the latter level, the price fell down to 114.80 support level and now is trading slightly above it. Our expectation is a retest of the previous new high, however, traders need to be cautious today ahead of the Fed’s interest rate decision. On the other hand, a penetration of the 114.80 barrier will open the door for the 112.80 handle. The volatility today may push the price in either way so any long or short positions could close.

The technical structure suggests further upside movement as the price rose above the 100-weekly SMA and, on the daily chart, the 100-SMA had a bullish crossover with the 200-SMA. Also, the 50-SMA has a strong momentum and is sloping upwards. Technical indicators are flattening in the overbought area. The RSI indicator is moving parallel with the 70 level while the MACD oscillator lies below its trigger line.