USD/JPY Fails to Hold Post-FOMC Low- 118.20 Up Next?

• Lack of momentum to hold the low (119.27) following the FOMC meeting raises the risk for a larger pullback especially as the RSI fails to retain the bullish momentum.
• Despite forecasts for a slowdown in Japan’s Consumer Price Index (CPI), the Bank of Japan (BoJ) may continue to endorse a wait-and-see approach as Governor Haruhiko Kuroda remains confident in achieving the 2% target for inflation over the policy horizon.
• Nevertheless, DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long USD/JPY, with the ratio currently standing at +1.90.
• Despite the pullback from a fresh monthly high (7696), NZD/USD may continue to track higher over the next 24-hours of trade as New Zealand’s Trade Balance is expected to widen to 350M from 56M in January.
• A further improvement in growth prospects may highlight a more bullish outlook for the kiwi especially as the bar remains high for the Reserve Bank of New Zealand (RBNZ) to revert back to its easing cycle.
• Need a close above 0.7675(23.6% retracement) to 0.7700 (50% retracement) to favor a larger advance in NZD/USD.