USD/JPY drops below 112.00 following Fed’s minutes

Matías Salord FXStreet

The US dollar dropped in the market after the released of the minutes from the latest FOMC meeting but then managed to recover most of the lost ground. The US dollar index bottomed at 96.96 and now is back above 97.10, inside the previous trading range.

USD/JPY fell to 111.57 reaching a fresh low as US yields tumbled after the FOMC, but then, the greenback was able to stabilize and the pair bounced to the upside. Currently is trading at 111.75/80, still below the 112.00 handle, where it was trading before the minutes.

The US dollar is looking for a direction following the Fed’s document. It is lower in the market while US bonds are holding to most of the gains, limiting the recovery of the greenback. According to the minutes, most Fed’s officials saw “tightening likely appropriate soon”.

FOMC minutes: Fed policymakers agreed that details of balance sheet plan should be announced soon

Technical levels

To the upside, resistance levels might be located at 112.10 (daily high), followed by 112.35/40 (20-day moving average) and 112.85/90 (Mar 20 & 21 high). On the downside, support now could be seen at 111.55/60 (daily low), 111.30/35 and 110.85 (May 23 low).

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD stays well offered below 1.1800

The selling pressure on EUR/USD is picking up pace, with the pair slipping decisively below the key 1.1800 level and sliding to fresh two week lows as Wednesday’s session draws to a close. The move lower comes as the US Dollar finds renewed strength after the latest round of US data and the release of the FOMC Minutes. Next of note on the docket will be the US weekly Initial Jobless Claims.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Bitcoin has found or is near a bottom, extended consolidation to follow: K33

Bitcoin (BTC) is nearing or has already established a bottom, which could be followed by a sustained period of slow price movement, according to K33.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.