• USD/JPY struggles to extend the previous day’s gains, the biggest in two weeks, near the key DMA.
• Clear upside break of fortnight-old descending trend line, U-turn from monthly support line keeps buyers hopeful.
• Downbeat oscillators, important moving averages keep sellers hopeful; 130.30 appears Yen pair buyer’s last defense.

USD/JPY bulls take a breather around 132.50 during early Wednesday, after posting the biggest daily gains in a month the previous day. In doing so, the Yen pair portrays the market’s cautious mood ahead of today’s key Federal Open Market Committee (FOMC) monetary policy meeting.

On Tuesday, USD/JPY marked recovery from a one-month-old descending support line while posting heavy gains, as well as crossing the short-term important resistance line. However, the 50-DMA seems to challenge the pair’s further upside afterward.

Apart from the 50-DMA hurdle surrounding 132.50, the bearish MACD signals and sluggish RSI (14) also prod the Yen pair buyers.

Even so, the quote’s successful U-turn from the one-month-old descending trend line and a clear upside break of a fortnight-old previous resistance line suggests that the USD/JPY is well-set to cross the 50-DMA hurdle.

Following that, a horizontal area comprising multiple levels marked since mid-February, around 135.10-30 will be important to watch as it holds the key for the USD/JPY pair’s run-up towards the 200-DMA hurdle surrounding 137.50.

Alternatively, a downside break of the resistance-turned-support line, near 132.00 by the press time, could mark another attempt by the Yen pair to conquer the monthly support line close to 131.00.

It’s worth noting that the USD/JPY bears should remain cautious unless the quote stays beyond an upward-sloping support line from mid-January, close to 130.30 by the press time.

USD/JPY: Daily chart

Trend: Further upside expected