FUNDAMENTAL OVERVIEWUSD:After the weakness triggered by the surprising breakthrough in US-Iran negotiationson Thursday, the US dollar consolidated as traders shifted their focus to theFOMC decision. The Fed is widely expected to keep interest rates unchanged and remove theeasing bias from the statement. At this meeting, we will also get the Summaryof Economic Projections (SEP) where inflation is expected to be revised higherwhile unemployment lower in the short-term. The focus will be mostly on the dotplot which is expected to show no cuts this year. All of this is expected andalready priced in.Fed Chair Warsh’s first press conference will also be in focus. Trump justgave him a big assist by ending the war, so Warsh can say the Fed can lookthrough the short-term increase in inflation. The hawkish surprise could be theFed signalling one or more rate hikes by year-end in which case we can expect thegreenback to get a boost. On the other hand, a dovish surprise would be the Fed keeping one rate cutby year-end or in 2027 as that would still be seen as an easing bias. Warsh hasrepeatedly stated that he doesn’t like forward guidance, so we might not get muchfrom his press conference. Looking ahead, the risk is that the negative supply shock caused by theUS-Iran war turns into a positive demand shock as the conflict ends that boostseconomic activity further requiring rate hikes anyway. That’s likely to be thenext tail risk.JPY:On the JPY side, the BoJ hikedthe policy rate to 1.00% as widely expected and announced the pause to the bondtapering programme from next fiscal year. The forward guidanceremained much the same with the BoJ looking to continue that normalisationprocess, raising the policy interest rate and degree of monetary accommodation“in response to developments in economic activity and prices as well asfinancial conditions”. BoJ’s Uchida didn’t offeranything new in the press conference reiterating the central bank’s willingnessto raise rates further if economic conditions align. The Japanese yen weakened slightlyfollowing the decision but eventually consolidated as the focus shifted to theFOMC decision.USDJPY TECHNICALANALYSIS – DAILY TIMEFRAMEOn the daily chart, we cansee that USDJPY is consolidating around the160.00 handle as traders await the FOMC decision. The natural target remainsthe cycle high around the 162.00 handle. A more dovish than expected Fed couldtrigger a bigger pullback into the 158.00 support, while a more hawkish oneshould lead to a rally into the 162.00 level. USDJPY TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we cansee the minor upward trendline continues to act as support. We can expect thebuyers to continue to lean on the trendline with a defined risk below it tokeep pushing into new highs. The sellers, on the other hand, will want to seethe price breaking lower to pile in for a drop into the 158.00 support next.USDJPY TECHNICALANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, there’snot much we can add here as from a risk management perspective, the buyers willhave a better risk to reward setup around the upward trendline to position fornew highs, while the sellers will gain more conviction for further downside ona break below the trendline. The red lines define the average daily range for today. UPCOMING CATALYSTSToday, we have the FOMCrate decision. Tomorrow, we get the latest US Jobless Claims figures. OnFriday, we get the Japanese CPI report and the expected signing of the US-Iran“peace deal” in Switzerland. This article was written by Giuseppe Dellamotta at investinglive.com.