The market is expecting a rate hike by the Federal Reserve Bank. The Federal Open Market Committee is set to vote on monetary policy and announce its decision at 2:30PM ET on Wednesday (3/15). The Fed is expected to raise rates from 0.75% to 1.00%. If this materializes, it would be only the 3rd rate hike since after the financial crisis in 2008. (courtesy of tradingeconomics.com)The inflation data of late is encouraging for the rate hike. We saw strong Producer Price Index (PPI) data in the past few months. We will see Consumer Price Index (CPI) data before the FOMC announcement. The CPI has also been on a streak of growth. The market is stalling ahead of the Fed decision, not only because of the slim but NOT insignificant chance of a hold. Also, if Janet Yellen announces a rate hike, the market will be curious to her guidance for the rest of the year - how many more rate hikes can we expect. The USD/JPY should break above the current resistance area between 115.40 and 115.65. A break above this area should open up 118.00 and even the 120.00 handle. Especially if it comes after the FOMC announcement and we close the week above 114.50. USD/JPY Daily Chart(click to enlarge)Failure:- If price fails to break above 115.65 this week, AND price closes below 114.00, we should anticipate some bearish push back towards the 112.00 support.- A failure to break higher accompanied by a dovish FOMC announcement would indeed put pressure on the 112.00 handle, below which, the 110.00 and 108.00 levels have strong support factors.