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It’s FOMC statement day today so you know we gotta take a look at them major dollar pairs!

I’m looking at USD/JPY’s wedge pattern. How about you?

Before moving on, ICYMI, today’s Asia-London session watchlist looked at AUD/JPY’s range ahead of China’s data releases and a busy day for Australia and Japan’s calendars. Be sure to check that out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • Canada’s inflation numbers at 1:30 pm GMT
  • U.S. EIA crude oil inventories at 2:30 pm GMT
  • FOMC statement at 6:00 pm GMT
  • FOMC presser at 6:30 pm GMT

What to Watch: USD/JPY

USD/JPY 1-hour Forex Chart
USD/JPY 1-hour Forex Chart

In a few hours, we’ll know what the U.S. Federal Open Market Committee (FOMC) thinks of Uncle Sam’s economic recovery.

Market geeks, specifically, will be on the lookout for any changes in the Fed’s plan to ignore hot inflation in favor of boosting the economy some more.

Watch out for upside revisions in the Fed’s inflation forecasts, which could spur taper talks. Ditto for the Fed’s dot plot projections, which could show that more members are supporting a rate hike as early as 2023.

If the Fed pulls an ECB and avoids taper talks, then the dollar could lose pips against its riskier counterparts. The dip in dollar demand could pull USD/JPY back to its wedge support on the 1-hour time frame.

Signs that the Fed is happy about the current pace of economic recovery, on the other hand, can heat up talks of tapering and/or tightening sooner than markets have priced in.

Increased demand for the dollar can push USD/JPY back to this week’s highs or even June’s highs near 110.30