USD/JPY rebounds, recovering some recent losses ahead of the Fed decision

USD/JPY edged higher on Tuesday, benefiting from partial profit-taking after a sharp three-day decline of 2%.

The recovery has been modest so far, barely exceeding the 23.6% Fibonacci retracement of the 145.92–142.35 downtrend. Technical signals are mixed, with daily Tenkan-sen and Kijun-sen maintaining a bearish configuration, while 14-day momentum remains in positive territory. However, the near-term outlook is still pressured by a recent bull-trap pattern on the daily chart, which formed above the 50% retracement of the 151.20–139.88 decline and the daily Kijun-sen.

Hopes for a potential US-China trade deal have somewhat offset the safe-haven demand sparked by escalating tensions between India and Pakistan.

Traders are now focused on the upcoming Fed announcement, seeking guidance on the U.S. central bank’s rate path in the coming months.

A daily close above the 10-day moving average (143.32) is needed to maintain hopes for a stronger recovery, targeting the next key resistance levels at 143.71/143.93 (38.2% Fibonacci retracement and daily Tenkan-sen).

On the other hand, a failure to sustain this recovery would confirm that broader bearish momentum remains intact, keeping the focus on a potential retest of the critical 140 support area.

Res: 143.71; 143.93; 144.13; 144.55
Sup: 143.19; 142.90; 142.35; 141.94