USD/JPY Breaks Another Key Resistance Zone Ahead of FOMC
The USDJPY has continued the upward momentum it displayed last week, breaking through the overhead resistance at 111.20 early in Monday’s session. This drive-up has been aided by the Dow Jones Index continues to record new all-time highs, and is likely to take a pause around this zone as traders wait to hear from the FOMC later in the week.
The recent rise in the USDJPY has seen the stochastic reach overbought levels on the 4-hour chart, and the cross above this level signifies a potential correction back to around the 111.20 level, a previous key resistance level which now may act as support for the next leg up. The daily stochastic is also in overbought territory but is yet to cross back down.
Traders should be on the lookout for any clues out of the FOMC conference on Wednesday and Thursday night as to when the start date may be to begin the unwinding process of QE. Thursday also sees the release of the BOJ policy rate and statement which may help the USDJPY break out to new recent highs.