USD/JPY struggling for direction, awaits Fed for fresh impetus

The USD/JPY pair struggled for a firm direction on Wednesday and seesawed between tepid gains/minor losses, within 15-20 pips narrow trading range around the key 110.00 psychological mark. 

Subdued action around the US treasury bond yields, and the US Dollar have failed to provide any fresh impetus. Also collaborating to the pair's range-bound price-action was investors' reluctant to initiate any fresh bets ahead of today's important US macro data and the much awaited FOMC decision, later during the day. 

   •  US Dollar deflates further sub-97.00 ahead of FOMC

The Fed is widely expected to go ahead and raise its benchmark interest rates by 25 bps points. Hence, investors focus would be on the accompanying policy statement, and subsequent press conference, where hints over the timing of next rate-hike action would help investors determine the next leg of directional move for the major.

   •  FOMC preview: Expectations are high but data do not justify a hike yet – Danske Bank

Also in focus would be important US macro data - the latest CPI print and monthly retail sales data for the month of May, which if adds to the recent slew of US data-disappointment would be highly negative for the greenback and turn the pair vulnerable to resume with its prior depreciating move.

Technical levels to watch

Immediate resistance is pegged near 110.30 level, above which the pair is likely to head towards testing 110.75-80 resistance area before eventually aiming to reclaim the 111.00 handle. On the downside, sustained weakness below 109.90 level is likely to drag the pair back towards 109.40-35 horizontal support ahead of the 109.00 round figure mark.