USD/JPY drops to test 108.00 as Fed sends US Dollar to the downside


  • US Dollar tumbles across the board after Federal Reserve hints at a possible rate cut. 
  • USD/JPY hits multi-day lows but so far remains above 108.00.

The USD/JPY pair fell from 108.35 to 108.02, reaching the lowest level since June 7 after the FOMC meeting. The move lower was triggered by a decline of the US Dollar across the board and also amid a rally in Treasuries. 

The pair so far managed to remain on top of 108.00 but it continues to be under pressure. A break lower would expose June lows around 107.80. On the upside, now 108.50 has become a barrier that protects the weekly highs around 108.75. 

The FOMC decided to leave rates unchanged. James Bullard voted against the decision and asked for an immediate rate cut. In the statement, the central bank signaled that it could cut rates over the next months if the economic outlook worsens. The move was seen as a shift to a dovish stance by market participants and pushed the US Dollar to the downside. Now trades await Powell’s press conference. 

Technical Levels

 

 

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.

Feed news

GME stock positioned for another short squeeze

Get the full analysis and chart in our Insights. Upgrade to Premium today    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD bounces above 1.21 as the dollar gives ground

EUR/USD has been marching higher as falling US bond yields are dragging the dollar down. Tensions are mounting ahead of the Fed's all-important decision later this week. 

EUR/USD News

GBP/USD hovers above 1.4100 ahead of Johnson's reopening announcement

GBP/USD is trading marginally above 1.41. UK PM Johnson is set to allow a four-week delay to Britain's reopening. Brexit acrimony and dollar strength also weigh on the currency pair.

GBP/USD News

XAU/USD slides below $1,850 level, fresh one-month lows

 Gold continued losing ground through the mid-European session and dropped to fresh one-month lows, below the $1,850 level in the last hour.

Gold News

Elon Musk energizes BTC bullish thesis, with ETH and XRP range-bound

BTC streaks towards imposing resistance between $41,581/$44,622. ETH rebounds from symmetrical triangle's lower trend line. XRP has notably decoupled from BTC, no meaningful direction since the June 8 low.

Read more

Fed balance sheet hits record high and equities follow suit

Another week another record high for stocks as equity markets power on. The theme of 2021 is back on track as yet another record high strengthens the series of records that 2021 has so far chalked up.

Read more

Forex MAJORS

Cryptocurrencies

Signatures