USD/JPY Price Analysis: Set for further downside past 136.00 as Fed decision looms

• USD/JPY takes offers to extend the previous day’s pullback from two-month high.
• Bearish MACD signals, descending RSI (14) near 50.00 level keeps Yen pair bears hopeful.
• Previous resistance line from late March restricts immediate downside, 137.80-90 region appears a tough nut to crack for USD/JPY bulls.

USD/JPY renews its intraday low near 136.00 as it extends the previous day’s U-turn from a multi-day high during early Wednesday. That said, the Yen pair keeps the earlier moves intact amid holidays in Japan and cautious mood ahead of the Federal Open Market Committee (FOMC) monetary policy meeting announcements.

Also read: FOMC Meeting Preview: Powell to keep every door open, surprises not out of the table after RBA

In doing so, the Yen pair stretches Tuesday’s U-turn from March’s peak, portraying a two-month-old horizontal resistance near 137.80-90, while justifying the bearish MACD signals. Adding strength to the downside bias is the descending RSI (14) line that currently seesaws near the 50.0 level, which in turn suggests the continuation of the latest weakness in the USD/JPY price.

However, the resistance-turned-support line from late March, around 135.70 at the latest, restricts the immediate downside of the USD/JPY pair.

Following that, multiple levels marked since March 10 and 50-SMA highlight the 135.15-135.00 area as the key support to break for the Yen pair sellers before taking control. Even so, a one-month-old ascending support line near 133.80 can act as the last defense of the USD/JPY buyers.

Meanwhile, USD/JPY pair’s recovery moves need to stabilize beyond the 137.00 immediate hurdle to convince intraday buyers. However, tops marked in March and May, around 137.80-90, quickly followed by the 138.00 round figure, could challenge the Yen pair bulls.

USD/JPY: Four-hour chart

Trend: Further downside expected