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USDJPY : Break Out or Break Down? Watch For Fed Tone !!

(USDJPY : 4 Hour Chart)

USDJPY today paused its losses by breaking the downtrend channel. The gains are capped by the key resistance at 102.23 which was earlier acting as resistance for the pair. 50 day and 100 day SMAs are moving closer to each other and might signal a continuation of downtrend of 50 day SMA crosses below the 100 day SMA. If the pair continues to decline after finding resistance at 102.23 the resistance trend line of the downward sloping channel will now be acting as the support trend line for the pair.

(USDJPY : Daily Chart)

However if looking at the daily chart, USDJPY seems like trading within a symmetrical triangle trend according to which the pair might breakout in any direction. Investors are also waiting for the Fed economic projections and speculating the timing of interest rate increase going to release tomorrow at 2:00 PM EDT. If the Fed statement turn out to be dovish the pair will break the support trend line of the triangle and decline and if the Fed statement turn out to be hawkish the pair will break the resistance trend line of the triangle. Nearest support in focus are 101.40 and 101.19. Nearest resistance in focus are 102.35 and 102.78.