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USDJPY Preparing For FOMC

FX:USDJPY   U.S. Dollar/Japanese Yen
50 0 1
The USDJPY             pair has come right back up into an area of resistance and have failed to close above the previous high at 121.83. However, it did break it for a brief moment and put in a new high at 122.01. We have some divergence on this pair which could be setting up for a double top. You can play this one of two ways. You can short it on the expectation that it has lost momentum and cannot breach and close above 122 OR you can play the breakout above 122.

Something to consider: The FOMC is on Wednesday and the main focal point will be whether the word "patient" has been removed. If "patient" is removed then this signals that rates are set to rise sooner than expected, probably this summer. However, if "patient" remains, then we look at status quo which could lead to a natural pull back in this pair.

Good Luck!
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