As reported here, the Fed was an easy call this meeting around and markets behaved rationally to it.
"Staying short of stocks, scalping out a long dollar position and fading gold on a cautiously optimistic Fed, taking profits before consolidating back to a neutral market outlook and position ahead of the BoJ tomorrow and US GDP Friday."
USD/JPY followed suit, with a rally in the dollar, USD/JPY scored highs of 106.49 before heading back to a neutral position while stocks and gold fell, supporting the yen again ahead of tomorrow's BoJ decision and US GDP on Friday. The Fed were cautiously optimistic with the statement explaining that the near term risks to the economic outlook have diminished and that the economy is expanding at a moderate pace. This has lead to speculation in the markets that September could be the month that the Fed hikes rates on a continuation of improvements in the economy.
USD/JPY levels
107.49's recent high on 20th July still marks the target for bulls on action from the BoJ perhaps while the downside remains as the 103.55 mid June low. On a break of this range, to the upside, 108.78 is the 78.6% retracement, guarding 111.45 May high while 102.44, 11th July low is a key downside target.
FOMC today, BoJ tomorrow: The Fed's mantra unveiled offers an insight to the BoJ tomorrow and some alternative thoughts on the Fed going forward.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: Extra gains in the pipeline above 0.6520
AUD/USD partially reversed Tuesday’s strong pullback and regained the 0.6500 barrier and beyond in response to the sharp post-FOMC pullback in the Greenback on Wednesday.
EUR/USD meets support around 1.0650
EUR/USD managed to surpass the key 1.0700 barrier in response to the intense retracement in the US Dollar in the wake of the Fed’s interest rate decision and Chair Powell’s press conference.
Gold surpasses $2,300 as Dollar tumbles
The precious metal maintains its constructive stance and trespasses the $2,300 region on Wednesday after the Federal Reserve left its FFTR intact, matching market expectations.
Bitcoin price reclaims $59K as Fed leaves rates unchanged
The market was at the edge of its seat on Wednesday to see whether the US Federal Reserve (Fed) would cut interest rates during the Federal Open Market Committee (FOMC) meeting.
The market welcomes the Fed's statement
The market has welcomed the Fed statement, and the S&P 500 is higher in its aftermath, the dollar is lower and Treasury yields are falling. There is still only one cut priced in by the Fed.