The USD/JPY has popped back above its psychological 90 level in reaction to solid gains in both the EUR/USD and GBP/USD. Hence, the USD/JPY's recent behavior stems from a slight return to risk, supported by the S&P's rally to 1050 and Crude's climb back to $80/bbl. However, despite today's recovery in the risk trade, upcoming central bank meetings could move the markets either way. The Fed, BoE, and ECB will all announce their monetary policy decisions in the next 24 hours, meaning the FX market could experience heightened volatility due to uncertainty surrounding the events. Although investors are expecting the Fed to stay pat, the BoE and ECB decisions could be wildcards should the central banks decide to diverge from their respective stances. Since Japan doesn't have any events on the board besides tonight's release of the BoJ meeting minutes, the USD/JPY's movements will likely be linked to broad based activity in the Dollar and U.S. equities. Because the USD/JPY is moving in correlation with the risk trade today, the currency pair may exert a positive correlation with the EUR/USD, GBP/USD, and U.S. equities for the time being. Considering the Dollar is at a crossroads, investors should keep a sharp eye on upcoming activity in reaction to monetary policy decisions.

Technically speaking, the USD/JPY has created a little breathing room by getting back above 90 along with our 1st and 2nd tier uptrend lines. Furthermore, should another downturn take hold, the currency pair has November and October lows to fall back on. However, the last pop in volume came on Friday's large pullback, meaning near-term momentum may be in favor of the downside. As for the topside, the USD/JPY potentially faces multiple uptrend lines along with 10/30 and 10/27 highs. Investors should keep in mind that there is still a debilitating, long-term downtrend at work, meaning the road to the topside may be filled with speed bumps.

Present Price: 90.76

Resistances: 90.78, 90.93, 91.08, 91.26, 91.44, 91.61

Supports: 90.60, 90.41, 90.29, 90.16, 89.91, 89.77

Psychological: 90