FUNDAMENTAL OVERVIEWUSD:The US dollar has beensupported since the last FOMC decision as the more hawkish than expected dotplot led to a quick repricing in interest rate expectations with traders increasingrate hike probabilities. We saw some minor hawkishrepricing yesterday as the total tightening expected by year-end rose to 37 bpsvs 32 bps seen on Monday. We haven’t got any meaningful catalyst though, sothat might have been just daily noise. The focus is now on the USNFP and CPI reports ahead of the July FOMC meeting. The market is pricing in a36% probability of a rate hike in July. Data in line or lower than forecastsshould lead to some dovish repricing and weigh on the greenback in theshort-term. Conversely, stronger than expected figures will likely boost the USdollar further. JPY:On the JPY side, nothinghas changed fundamentally but the break above the 2024 high on USD/JPY increasedthe bearish momentum. There’s been some verbal intervention but nothing reallystrong yet. On the monetary policyfront, the BoJ hiked the policy rate to 1.00% as widely expected at the lastmeeting and announced the pause to the bond tapering programme from next fiscalyear. The forward guidanceremained the same with the BoJ looking to continue the normalisation process,raising the policy interest rate and adjust the degree of monetaryaccommodation “in response to developments in economic activity and prices aswell as financial conditions”. The divergence with the Fedwill continue to keep the USD/JPY pair skewed to the upside until the US datastarts to point in the other direction. USDJPY TECHNICALANALYSIS – DAILY TIMEFRAMEOn the daily chart, we cansee that USDJPY has finally broke out of therecent consolidation and reached the highest levels since 1986. The breakout actedas a catalyst and more buyers started to pile in to extend the rally into newhighs. The old resistance around the 161.95 level will now likely act assupport. If we do get a pullback, wecan expect the buyers to step in around the support with a defined risk belowit to keep pushing into new highs. The sellers, on the other hand, will want tosee the price breaking lower to pile in for a drop into the major upward trendlinearound the 158.00 handle.USDJPY TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we havea minor upward trendline defining the bullish momentum. The buyers will likelycontinue to lean on the trendline with a defined risk below it to keep pushinginto new highs. The sellers, on the other hand, will look for a break to extendthe pullback into the support.USDJPY TECHNICALANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, there’snot much we can add here although from a risk management perspective, thebuyers will have a better risk to reward setup around the trendline and thesupport. The sellers, on the other hand, should wait for the price to fall backbelow the 161.95 level to start positioning into new lows. The red lines definethe average daily range for today. UPCOMING CATALYSTSToday, we have the USADP report, the US ISM Manufacturing PMI and Fed Chair Warsh speaking at theECB Forum in Sintra. Tomorrow, we conclude with the US NFP report, and the USJobless Claims figures. This article was written by Giuseppe Dellamotta at investinglive.com.