USD/JPY retests 106.30-35 supply zone

   •  JPY weighed down by comments by a Japanese Finance Ministry official.
   •  Stability in equity markets/easing USD bearish pressure supportive.
   •  The much awaited FOMC decision to provide a fresh directional impetus.

After an initial dip to sub-106.00 level, the USD/JPY pair regained some positive traction and has now moved back to 106.30-35 supply zone. 

The Japanese Yen was being weighed down by comments by a Japanese Finance Ministry official, saying that the recent movement in the Yen has been too volatile and is out of sync with the economic fundamentals. 

This coupled with some signs of stability in equity markets, which tends to weigh on the Japanese Yen's safe-haven appeal, and easing US Dollar bearish pressure remained supportive of the pair's modest uptick on Tuesday.

It would now be interesting to see if bulls are able to make it through the immediate resistance or the pair entered a consolidation phase as the market focus remains on the highly anticipated FOMC decision, which would help determine the pair's next leg of directional move. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: “The spot looks set to test 106.80-107.00 over the next 24 hours. A close today above the 30-day MA would add credence to the rounding bottom pattern and open doors for a sustained rally above 107.00.”

“Failure to beat or hold above the 30-day MA resistance and a drop below the ascending trendline could yield a drop to 105.00,” he adds further.