USD/JPY technical analysis: Set-up seems tilted in favour of bulls, FOMC awaited for fresh impetus

• The pair consolidates in a range ahead of the highly anticipated FOMC decision.
• Weekly bearish gap opening lows marks key pivotal support on the downside.

The USD/JPY pair extended its sideways consolidative price action and remained confined in a narrow trading band through the mid-European session on Wednesday, awaiting the outcome of the highly anticipated FOMC meeting.
 
The fact that the pair has managed to hold its neck above the 108.00 round-figure mark and also found acceptance above 100-day SMA for the first time since early-May, the set-up might have already shifted in favour of bullish traders.
 
Adding to this, technical indicators on hourly/daily charts have been holding in the bullish territory and add credence to the constructive outlook, supporting prospects for an extension of the recent recovery move from multi-month lows.
 
However, traders are likely to wait for a strong follow-through buying before positioning for any further near-term appreciating move, possibly beyond the 109.00 handle towards testing the very important 200-day SMA, around the 109.40 region.
 
On the flip side, any meaningful pullback below the 108.00 handle might continue to attract some dip-buying near the weekly bearish gap swing lows, around mid-107.00s, which if broken might negate the near-term bullish outlook.
 
Failure to defend the mentioned support might now turn the pair vulnerable to slide back below the 107.00 handle and head towards testing a previous strong horizontal resistance breakpoint, now turned support near the 106.75-70 region.

USD/JPY daily chart