FXStreet (Mumbai) - The USD/JPY rally seen in Asia fizzled near 123.30 region as we head into the early European trades, as the USD bulls take a breather and consolidate gains on 123 handle. USD/JPY retraces from 123.26 – two-day highs Currently, the USD/JPY pair trades 0.28% higher at 123.16, facing stiff resistance near 123.25 zone. The rise in the discount rate expected to be announced by the Fed later today, would signal that the Fed has embarked upon the policy normalization process, and now keeps the bulls in a wait-and-see mode before the next leg higher towards August highs. Moreover, the upbeat sentiment in the global equities also boosts the appetite for riskier assets, thus offering support to the USD/JPY pair. While Fed’s William’s comments that should data meet or beat expectations, there is a 'strong case' for a December hike, also underpins the major. While the Fed announcement is likely to remain the main highlight, the US manufacturing and housing data will be also closely watched. USD/JPY Technical levels to watch The prices surpasses 123 handle and face immediate resistance at 123.64 (Nov 20 High). A break above the last, the major could test 124.17 (Aug 21 High). To the downside, the immediate support in sight at 122.97 (10-DMA) below which 122.54 (20-DMA) would be tested. For more information, read our latest forex news.