Awaiting a shove from the FOMC decision
The USDJPY is consolidating above and below the 100/200 hour moving averages in a narrow trading range as traders await the FOMC rate decision at 2 PM ET. The low to high trading ranges only 29 pips. That compares to a 22 day average (about a month of trading) of 66 pips.
The 100 and 200 hour moving averages are near converged at 113.85. The high price was reached in the Asian session right at the 114.00 level. The low was just reached at 113.71 the current price has bounced up to 113.85 right near the moving average levels again.
Taking a broader look going back to October 13 (see red box). The price has been in a range between 113.21 (which also happens to be the 38.2% retracement of the move up from the October low) and 114.69 (most of the price action has been below 114.457).
The price over the longer period, has seen waves higher and lower, above and below the 100 and 200 hour moving averages as traders ponder the next move in the US dollar.
The US stocks have been moving up (the major indices are at all-time highs) which tends to help the pair, but the price action in the pair has not followed that pattern.
In the US debt market (another influence), the benchmark 10 year yield has moved higher and back down over that time between 1.5% and 1.7%. The current yield is 1.544%. The up and down price action I guess supports the up and down price action in the USDJPY.
Overall, the longer review along with the shorter view from today, has the price that a neutral level. That is suggestive of the market awaiting what the Fed may or may not do. If the Fed is more hawkish, we should expect a run back to the highs. If the Fed is less hawkish, the lower extremes would be targeted.
