USD/JPY flat-lined near 114.70, awaits Fed confirmation

The USD/JPY pair extended retracement from Friday's multi-week highs and dropped farther below the key 115.00 psychological mark.

Currently trading around 114.60-70 region, the pair traded with bearish bias for the second straight session and reversed nearly 100-pips from Friday's 7-week tops as traders preferred to l0ck-in some profits ahead of this week's key event risk - the two-day FOMC meeting starting on Tuesday. 

The pair, however, has managed to bounce off lows as disappointing core machinery orders and tertiary industry activity data from Japan, seems to be weighing on the Japanese Yen and helping the pair to defend mid-114.00s for the time being. 

Investors now await an eventual Fed rate-hike action and an update on the central bank's economic projections before determining the pair's next leg of directional move. With an empty US economic docket, the US Dollar price-dynamics would remains a key determinant of the pair's movement on the first day of a new trading week.

Technical levels to watch

A follow through retracement below 114.40-35 immediate support is likely to accelerate the slide towards 50-day SMA support near the 114.00 handle. Below 114.00 mark, the corrective slide could get extended towards 113.75-70 area ahead of 113.20 important support. 

On the upside, the 115.00 mark now seems to act as immediate resistance, above which the pair is likely to aim back towards 115.50 resistance area. Momentum above multi-week highs resistance now seems to pave way for additional up-move for the pair towards 115.75 intermediate resistance, en-route the 116.00 handle.