FUNDAMENTAL OVERVIEW USD:The US dollar strengthened across the board on Friday after Fed Chair Warsh delivered a hawkish speech at the Jackson Hole Symposium. The key passage was him saying "I would be hard pressed to describe broad financial conditions as restrictive". The market interpreted that as him leaning against the recent easing in financial conditions and, therefore, retightened them.This process has, of course, extended the corrections in the "debasement" trades, with the US dollar returning to pre-US Treasury announcement levels. The rate hike probabilities for the September meeting have also increased, with the market now seeing a 67% chance of a hike. Warsh has also reiterated that the Fed is focused solely on inflation now and mentioned that the progress has been slow. For this reason, I think only a soft US CPI report could bring the probabilities below 50% and deter the Fed from hiking at the upcoming meeting. If the probabilities stay at or above 50%, the Fed might be forced to hike regardless because failure to do so would send a dovish message. JPY:On the JPY side, the currency strengthened reportedly on the back of hawkish BoJ Takata’s comments. I don’t think that was the culprit as Takata is a known hawk. In fact, interest rate expectations remained largely unchanged. More likely, we’ve seen some profit-taking ahead of the key resistance around the 160.50 level on USD/JPY. BoJ Governor Ueda has also commented on monetary policy and didn’t offer anything new. On the contrary, his comments were a bit less hawkish compared to market’s expectations. As a reminder, the September rate hike is already priced in, so the market won’t care about that. Traders will be focused on forward guidance and signals of potential faster pace. The trend is unlikely to change without a dovish repricing in Fed interest rate expectations or a faster BoJ tightening pace. USDJPY TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that USDJPYhas basically reached the key resistance zone around the 160.50 level. That’s where we can expect the sellers to step in with a defined risk above the resistance to position for a drop into the 155.00 handle. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 164.00 level next.USDJPY TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we have an upward trendline defining the bullish momentum. The buyers will likely continue to lean on it with a defined risk below it to keep pushing into new highs. The sellers, on the other hand, will need a break to gain more conviction and pile in for a drop into the 155.00 handle next.USDJPY TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we can see more clearly the rejection around the trendline and the key swing low around the 159.43 level. The sellers will want to see the price breaking below this support to extend the drop into new lows, while the buyers will remain in control as long as the price stays above the trendline. The red lines define the average daily range for today. UPCOMING CATALYSTSToday, we get the US ADP report. Tomorrow, we have Fed’s Waller, the US Jobless Claims and the US ISM Services PMI. On Friday, we conclude the week with the US NFP report. This article was written by Giuseppe Dellamotta at investinglive.com.