USD/JPY Price Analysis: Climbs further beyond 148.00 mark, fresh YTD peak ahead of FOMC

• USD/JPY scales higher for the second straight day and climbs to a fresh high since November 2022.
• Intervention fears might hold back bulls from placing fresh bets ahead of the crucial FOMC decision.
• The technical setup suggests that the path of least resistance for spot prices remains to the upside.

The USD/JPY pair gains some follow-through positive traction for the second successive day on Wednesday and touches a fresh high since November 2022 during the early part of the European session. Spot prices, however, retreat a few pips in the last hour and currently trade just above the 148.00 round-figure mark, up around 0.15% for the day, as traders start repositioning for the highly-anticipated FOMC monetary policy decision.

Growing acceptance that the Federal Reserve (Fed) will stick to its hawkish stance and keep the door open for at least one more rate hike by the end of this year continues to act as a tailwind for the US Dollar (USD). That said, speculations about an imminent shift in the Bank of Japan's dovish stance, along with fears that authorities will intervene to prop up the Japanese Yen (JPY), keep a lid on any further appreciating move for the USD/JPY pair.

From a technical perspective, sustained strength and acceptance above the 148.00 round-figure mark could be seen as a fresh trigger for bullish traders. Moreover, oscillators on the daily chart are holding in the positive territory and are still far from being in the overbought zone. This, in turn, suggests that the path of least resistance for the USD/JPY pair is to the upside and supports prospects for an extension of the recent upward trajectory.

Hence, some follow-through move towards testing the next relevant hurdle near the 148.80-148.85 region, en route to the 149.00 round figure, looks like a distinct possibility. the momentum could get extended further and lift the USD/JPY pair to the 149.70 area before bulls aim to reclaim the 150.00 psychological mark for the first time since October 2022.

On the flip side, any corrective decline might now find some support near the daily low, around the 147.70-147.65 area, which is closely followed by the weekly trough, around mid-147.00s. A convincing break below the latter might prompt some technical selling and drag the USD/JPY pair back towards the 147.00 round figure. Spot prices might then slide to the 146.50 horizontal support, which if broken will expose last week's swing low or sub-146.00 levels.

USD/JPY 4-hour chart

Technical levels to watch