USD/JPY hammering closer to the 110 handle, Greenback bidding up ahead of the FOMC

• The USD continuing its upward stretch, Yen struggling to move out of the way fast enough.
• FOMC meeting unlikley to bring another rate hike, but still could send markets into a frenzy.

The USD/JPY is lifting once more, searching for 110.00 after falling back into 109.60 in the early Asia session.

The US Dollar continues to march up the charts against the broader FX market, and the Bank of Japan's (BoJ) recent softness is still fresh in trader's minds, noting that the central bank is still committed to their hyper-easing monetary policy, and lagging inflation figures for Japan's economy means the BoJ is even further out from any rate hikes than most market participants believed only a few months ago.

USDJPY: Seems likely to trade a narrow range ahead of the FOMC

The US session for Wednesday sees the FOMC's Monetary Policy Meeting at 18:00 GMT, and while the FOMC is widely expected to stand pat on rates this week, traders will be keeping a close eye as they try to determine how close the Fed is to calling for additional rate hikes this year. The FOMC currently only plans to raise interest rates two more times in 2018, but many traders are expecting the US' growing economy to eke a third rate hike before the end of the year.

USD/JPY analysis: modest advance, still in the way to break above 110.00

USD/JPY levels to watch

Greenback buyers are aiming their sites directly at the 110.00 major handle in the USD/JPY pair, and as FXStreet's own Valeria Bednarik noted earlier, "the pair retains its positive stance according to technical readings in the 4 hours chart, as it holds far above bullish moving averages, while the Momentum indicator heads north at weekly highs, and the RSI retreats modestly after testing 70. Overall, a break of 110.00 seems likely with a hawkish Fed, with steady gains above it favoring an advance up to 111.20 the next big static resistance level."

Support levels: 108.95 108.60 108.25

Resistance levels: 109.50 109.90 110.20