USDJPY is leading losses among the majors in today’s trading. This follows as investors reduce their exposure to the USD ahead of the FOMC rate decision later this week. As of this writing, the currency pair is down by 0.51% as it trades around 105.58.
On Wednesday, the FOMC is expected to keep its interest rate and quantitative easing program steady. However, investors seem to be bracing for concerns that would come along with Fed Reserve Chairman Powell’s speech. Concerns are brought about by the continued rise in coronavirus cases in the US. Some naysayers warn that the country may need to impose widespread lockdowns again soon.
Meanwhile, there also seems to be a consensus that the government may announce an additional relief program this week as hinted by the Senate. This could help boost the US dollar if Republicans and Democrats are able to smoothly pass additional funding to citizens.
If not, we could see USDJPY continue its slide.
On the weekly time frame, it can be seen that USDJPY has been under heavy selling pressure. The currency pair is currently trading at its four-month lows. If sellers are able to maintain their momentum, we could soon see USDJPY trade to its near-term support at 104.60 (where it found support on March 18, 2018 and 25, 2019).
On the other hand, if USDJPY can attract enough bids in this weeks trading, it may find support at last week’s lows. Reversal candlesticks around its current price may mean that the currency pair could soon trade higher to 107.50 where it peaked last week.