• USD/JPY slips amid ongoing volatility, but key levels between ¥155 and ¥158 remain central to near-term direction.
• Broader strength still favors the dollar, with FOMC guidance likely to determine the next significant move.

The US dollar has fallen a bit against the Japanese yen during the trading session on Wednesday, as we continue to see a lot of noisy trading. The 155 yen level is an area that has previously been supported over the last couple of days, and therefore, if we bounce from here, it would not be a huge surprise.

If the market were to break down below the 155 yen level, then it opens up the possibility of a move down to the 153 yen level, with the 50-day EMA sitting right around the same area. The market turning around and breaking above the 156 yen level opens up the possibility of a move to the 158 yen level. The 158 yen level is an area that has seen resistance previously. And I think if we can break above there, it could open up the possibility of a move to the 160 yen level. Ultimately, this is a market that I think continues to see a lot of volatility and choppiness, but really with the interest rate differential coming into play.
 

US Dollar Isn’t Dead Yet
 

I think you still see US dollar strength overall. A lot of this is going to come down to the FOMC press conference, not the interest rate decision next Wednesday. And if it sounds remotely hesitant to cut rates for the next multiple meetings, then I suspect that's where we start to bounce pretty significantly. Regardless, you get paid to hold this pair. I've been long for this market in various sizes for several months now, and nothing's really changed at this point.

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