USD/JPY keeps the red near mid-106.00s, FOMC decision awaited
- USD/JPY edged higher and moved away from six-week lows set earlier.
- The uptick seemed rather unaffected by the dismal US Q1 GDP report.
- The US economy contracted by 4.8% in the three months to March.
- Wednesday’s key focus will remain on the latest FOMC policy decision.
The USD/JPY pair caught some bids in the last hour and recovered further from six-week lows, albeit lacked any strong follow-through.
The pair managed to find some support near the 106.25 region and staged a modest intraday recovery on Wednesday amid the prevalent risk-on mood, which tends to undermine the Japanese yen's perceived safe-haven demand.
The uptick picked up some pace during the early North-American session and seemed rather unaffected by the awful US GDP report, which showed that the economy contracted sharply by 4.8% during the first quarter of 2020.
Meanwhile, the US dollar bearish pressure remained unabated in the wake of the downbeat macro data and turned out to be one of the key factors that kept a lid on any further recovery ahead of the latest FOMC policy decision.
The US central bank is scheduled to announce its decision later during the US trading session. This will be followed by the post-meeting press conference, where comments by the Fed Chair Jerome Powell will be scrutinized closely.
Investors will look for clues about the central bank's future policy path, which should play a key role in influencing the near-term USD price dynamics and eventually help determine the pair's next leg of a directional move.
Technical levels to watch