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Forexlive Analysis: USDJPY Technicals

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The Federal Reserve decided to keep interest rates unchanged, as expected, with no significant changes to their statement. Fed Chair Powell maintained a neutral stance, emphasizing that it was premature to react to recent inflation data. Despite this, economic projections were upgraded, showing higher growth and inflation and a lower unemployment rate. The market is now anticipating the first rate cut in June.

On the other hand, the Bank of Japan announced the end of its negative interest rates policy, raising interest rates by 10 bps. The central bank also scrapped yield curve control and ETF purchases while maintaining quantitative easing. Japanese PMIs improved, wage data exceeded expectations, and the CPI remained in line with projections. The market is now expecting another rate hike from the BoJ, although the timing remains uncertain.

On the technical analysis front, the USDJPY pair is consolidating below a crucial resistance level at 151.92. A breakout above this level could trigger a strong move to the upside, while a drop back to the bottom trendline of the triangle is possible if sellers step in at these levels. The 4-hour chart shows a recent breakout of the uptrend trendline, with a potential double top pattern forming. The 1-hour chart indicates a minor support zone at 151.00, with sellers looking for a break below this level while buyers are waiting for a break above the resistance.

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