USD/JPY: all eyes on the FOMC now, 110 here we come?

• USD/JPY: bears cleaning up some territory left behind by the bulls just below the 110 handle. 
• USD/JPY: FOMC is now on the cards and that could be the next event to topple 110 on a hawkish outcome.

USD/JPY has been shoved over the 10-hr SMA at 109.77 in the open of Tokyo and the bears are taking back some ground as the pair reaches a cap of 109.91. From here, it is whether the dollar has legs left ahead of the FOMC outcome in the US session. Currently, USD/JPY is trading at 109.78, down -0.09% on the day, having posted a daily high at 109.93 and low at 109.69.

USD/JPY has been on One-Way Street for the best part of the time since breaking through onto the 108 handle and working its way to 109.93 the high. Indeed, 110.20 is on the radar, but the dollar will need to do some extra legwork to get there and 92.50 is a psychological level where consolidation and profit taking could hold up the bulls in their tracks. Similarly, a less hawkish outcome than what the markets are expecting from this meeting around would send the dollar lower as would concern on the geopolitical front.  

FOMC outlook

"We expect few new developments out of the 1-2 May FOMC meeting. We think the post-meeting statement will acknowledge somewhat softer-than-expected economic activity thus far in 2018. However, the Committee will likely expect this slowdown to be largely transitory," explained analysts at Nomura. 

Forex today: dollar marking out higher territory, key levels in G10's under pressure

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the pair retains its positive stance according to technical readings in the 4 hours chart: "It holds far above bullish moving averages, while the Momentum indicator heads north at weekly highs, and the RSI retreats modestly after testing 70. Overall, a break of 110.00 seems likely with a hawkish Fed, with steady gains above it favoring an advance up to 111.20 the next big static resistance level."