The US Dollar (USD) inched lower against the Japanese Yen (JPY) on Monday, decreasing the price of USD/JPY to less than 114.75 ahead of the US monetary policy announcement. The technical bias remains bullish because of a higher low in the recent downside move.
As of this writing, the pair is being traded around 114.66. A hurdle can be noted near 115.55, a short term horizontal resistance ahead of 116.00, the psychological number and then 118.61, the high of January 3rd, 2017.
On the downside, a support may be seen near 112.51, the trendline support area ahead of 112.00, the psychological number and then 109.97, the downward trendline as demonstrated in the given above daily chart with pink color. A break and daily closing below the 109.97 support shall incite renewed selling pressure, validating a move towards 109.50 and then 109.20. The technical bias shall remain bullish as long as the 112.18 support area is intact.
US Monetary Policy Announcement
The Federal Reserve is scheduled to announce its monetary policy today during the US trading session. According to the average forecast of different economists, the central bank is likely to increase its benchmark interest rate by 0.25% to 1.00% for the third time since the great recession of 2008. Generally speaking, higher interest is considered bullish for the US Dollar (USD) and vice versa.
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term.