USD/JPY tests 107.00 after the Fed rate decision and statement release
- USD/JPY test the psychological 107.00 support zone as bears attack the pair.
- The Fed dot plot shows that rates are not predicted to move till the end of 2022.
USD/JPY 4-hour chart
USD/JPY has dipped lower following the FOMC rate decision and statement on Wednesday. The markets were not predicting any move in rates from the Fed but there were some outside bets of a rate rise being projected in late 2020. The dot plot has now confirmed that none of the Fed officials see that happening.
Looking at the 4-hour chart below, the market headed straight for the support zones and 107.00 so far has stalled the bears. If this level breaks then the pair could be heading for the black support line lower down at 106.37 and beyond that 106.00.
All off the indicators are looking bearish as the Relative Strength Index dips below the 30 oversold line once again and the MACD histogram holds firmly in the red. The MACD signal lines are now widening below the zero level, which is also a bearish sign.
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USD/JPY daily chart
The daily chart is firmly below the 55 and 200 moving averages. The market looks to be heading towards the lower levels and the green support line at 106.74. Beyond this level, the black line at 106.00 could be next. The indicators are pulling away from the best levels and the MACD histogram has now printed a red bar. The Relative Strength Index signal line is now below the 50 mid-line too.
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Additional levels
Author
Rajan Dhall, MSTA
FX Daily
Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.
