FXStreet (Mumbai) - The USD/JPY pair ran through fresh offers at the hourly 50-SMA at 121.18 and dropped sharply to lows near 121 handle, tracking losses from the USD index. USD/JPY testing daily pivot at 120.94 Currently, the USD/JPY pair trades modestly flat at 120.98, fading a spike to 121.18 highs. The overnight recovery from 120.35 levels fizzled as the US dollar came under renewed selling pressure against its major peers on the back pre-FOMC jitters that hit markets. The Fed’s 2-day monetary policy meeting commence later today, and the most awaited outcome on the US interest rates will be announced tomorrow. Moreover, the yen bulls fight to regain control amid falling Japanese and Chinese stocks, with Japan’s the Nikkei sliding nearly -1% and China’s A50 index down -0.77% so far. Meanwhile, the sentiment on the global equities will dominate further moves on the major ahead of the US CPI data, the last data before Wednesday’s Fed rate hike decision. USD/JPY Technical levels to watch The prices retreat and find the immediate support is located at 120.57 (Dec 11 Low) below which 120.35 (Dec 14 Low) would be tested. While the immediate resistance is located at 121.18 (1h 50-SMA/ daily high). A break above the last, the major could test 121.56 (1h 100-SMA). ------- What will 2016 bring to the Forex traders? Attend our Forex Forecast 2016 - The Panel with Ashraf Laidi, Valeria Bednarik, Boris Schlossberg, Adam Button, Ivan Delgado and Dale Pinkert. Register for the live event on Dec. 18th and get the recording too. ------- For more information, read our latest forex news.