Last Friday, we saw USD/JPY retreat from 105.50, respecting a falling trendline.USD/JPY Daily Chart 11/1(click to enlarge)At the crossroads:- USD/JPY has completed a price bottom after it broke above a key resistance at 104.30,- However, this bullish breakout is being challenged by a falling trendline seen in the daily chart. - The 1H chart below shows the market in a triangle consolidation.- A break above 105.50 at this point would break the falling trendline. This scenario opens up the 107.65 support/resistance pivot and July-high. - A break below the 104.30 pivot (previous resistance) on the other hand would open up the 103.16 pivot. (see in 1H chart below).- An aggressive bearish outlook would be the 102 pivot area. USD/JPY 1H Chart 11/1(click to enlarge)Fed event risk:- The market is in this triangle because it is tentative and that is because the Federal reserve bank will reveal its latest interest rate policy guidance .- Most central bank watchers expect the bank to hold, but are anticipating some guidance on a December rate hike. - The market has been disappointed before, so it does not seem to be jumping on this anticipation. - Therefore, if the market indeed interprets a December rate hike from tomorrow's Fed statement, it would likely push USD/JPY upwards to challenge the 105.50 resistance.- A break above 105.50 opens up 107.65.- If a December rate hike is ruled out, the market might fade the USD/JPY to test the 104.30 pivot. Again below 104.30, the next key pivot is around 103.16.By the way, I didn't mention the BoJ because there was nothing new in its monetary policy statement. It's kicking the can down the road in terms of inflation target, so we can expect the policy to remain unchanged for a while. No surprise here.