USD/JPY drops to 6-day lows after Fed meeting
- US central bank raises rates by 25bp to 1.25-1.50% as expected.
- Projects three rate hikes for 2018.
- US Dollar weakens after the announcement.
- Yellen’s last post-meeting press conference about to start.
The USD/JPY pair dropped after the Federal Reserve decision from 113.00 to 112.66, hitting the lowest since December 7. Then it rebounded modestly but it was holding under 113.00. The weak tone of the US dollar was keeping the pair under pressure.
USD down but not much after Fed
The Fed decided to raise rates 25bp. Two FOMC members (Evans and Kashkari) voted against the decision to tighten. According to updated projections, the median forecast shows three quarter-point hikes during 2018 and two more in 2019. The hike and the projections came as no surprise to market participants.
The US dollar dropped after the announcement probable as some were expecting more hawkish projections. The yen rose against the US dollar but remained mostly unchanged versus its other rivals. The DXY reached a 6-day low at 93.55
Attention now turns to Janet Yellen’s press conference (19:30 GMT). The next post-meeting press conference will be in March, held by Jerome Powell.
Levels to watch
To the downside, immediate support is seen at 112.35 (Dec 5 low), followed by 111.95/112.00 (Dec 6 low) and 111.60/65 (Oct lows). On the upside, resistance levels are now seen at 112.95, 113.20/25 (Dec 11 low) and 113.55 (Dec 13 high).
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.
