USD/JPY awaits Fed, BoJ decisions and US-China talks for direction

USD/JPY remains in consolidation mode as traders position ahead of critical events including Federal Reserve and Bank of Japan monetary policy decisions, alongside US-China diplomatic talks. The pair's directional bias hinges on potential policy divergence between the two central banks, with the Fed expected to maintain its hawkish stance while the BoJ continues its ultra-accommodative policy. US-China trade negotiations add another layer of complexity, potentially impacting risk sentiment and safe-haven yen demand. Technical analysis suggests the pair is coiling within a narrowing range, preparing for a significant breakout. Key resistance lies at recent highs, while support levels have been established at previous consolidation zones. The combination of central bank decisions and geopolitical developments could trigger substantial volatility in USD/JPY. Traders should prepare for increased price swings as these events unfold, with the potential for a decisive move that establishes the pair's medium-term trend direction.