- Fed’s dovish hold is sending the USD lower across the board.
- USD/JPY bears taking control below new hourly resistance structure.
USD/JPY is falling with a strong supply in the US dollar. At the time of writing, the pair is down 0.13% having dropped from a high of 109.32 to a recent low of 108.78.
DXY is down 0.44% having dropped from a high of 92.0040 to a low of 91.3930.
The dollar is falling because the markets are rethinking the Federal Reserve’s playbook and coming more into line with the Fed’s median dot plot.
Today, the Federal Open Market Committee ended a two-day meeting today.
As expected, there were no changes to the benchmark interest rate with the target standing at 0.0%-0.25% still. Interest rates on the excess reserves were also unchanged at 0.10%.
However, the market was paying close attention to the median dot plot for 2023 as well.
In the December Dot Plots, some policymakers had envisioned a hike in 2023 and the market had priced in the risk of more members shifting to that view.
The Dot Plot still shows no hike which is has been a bearish factor for the US dollar today.
Fed’s Powell presser
Jerome Powell, the Fed’s chairman, is speaking at a press conference and the rates market has responded in kind.
US 10-year yields are lower, falling from 1.666% to a low of 1.6200% as Powell reiterates that a ‘strong bulk’ of the FOMC is not showing a rate increase through 2023.
-
Powell speech: Economy is a long way from employment, inflation goals
USD/JPY technical analysis
In the prior analysis, it was shown that there was a risk of a break of trendline resistance as follows:
Live market
There could now be a correction to test old support before a further decline to the next layer of support.
Share
