USD/JPY Rallies to Multi-Decade Highs Amid Fed and BOJ Policy Decisions
The USD/JPY pair continues its upward momentum after breaking out of a symmetrical triangle in last week's outlook. The breakout above 163 has sent the pair to fresh multi-decade highs near 164, but immediate resistance is found at this level.
A convincing break above 164 would bring the big figures such as 165 into view, while below 163.65, the first level of support is followed by 163.24. The July uptrend and horizontal support at 162.70 become key technical levels for bulls to defend if the pair falls.
The week ahead will be crucial in determining whether the rally can extend further, with policy decisions from the Federal Reserve and Bank of Japan looming large. The Fed's interest rate decision on Wednesday is expected to be closely watched, with a one-in-three chance of a 25bp rate hike implied by overnight index swaps.
The BOJ's policy decision less than 24 hours later could also prove significant for the near-term directional risk in USD/JPY. No change in the policy rate is expected, but traders will be looking at updated forecasts and Governor Kazuo Ueda's press conference for insight into the BOJ's thinking.