USD/JPY pare gains, flat around 106.10 ahead of Fed statement

Trading around the USD/JPY pair has been uneventful as market players opt to remain on the sideline ahead of today's Fed monetary policy statement and economic projections. 

Earlier during the day, risk-on sentiment did extend support for the greenback to cautiously inch higher against its Japanese counterpart, with the USD/JPY pair touching an intraday high of 106.40. 

However, as day progressed the pair erased all of its gains and turned absolutely flat to currently trade around 106.15 level, ignoring an upbeat reading for the Empire State Manufacturing Index. Next to follow will be release of US capacity utilization and industrial production data, preceding the much awaited and talked about monetary policy decisions from the US Fed, later during NY trading session, and the Bank of Japan on Thursday.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "The 1 hour chart shows that the price retreated from its 100 SMA, whilst the technical indicators have turned south within positive territory, and are aiming to cross their mid-lines towards the downside, retreating further after the release of US PPI data, showing that producer prices rose for a second consecutive month, up by 0.4% against previous 0.2% and the 0.4% expected, boosted by rising oil prices. In the 4 hours chart, the price keeps developing far below its moving averages, both in the 108.30/50 region, whilst the technical indicators are neutral-to-bearish."

"Support levels: 105.90 105.50 105.00
Resistance levels: 106.40 106.85 107.30"