Wednesday, September 26, 2018

USD/JPY - 27 September 2018


Fundamental Highlights

The Federal reserve duly raised rates yesterday night while expectations for an additional hike firmed for December. Market goes into the FOMC hawkish but came off short. The rates rise was once again met with Trump’s displeasure as the president once again questioned the need to raise rates. “I am not happy about that," he said at a press conference in New York. He also said he was happy for people who save their money and "are starting to get interest." Language describing the policy stance as “accommodative” was removed, but Fed Chair Powell later stated that “Dropping accommodation does not change anything with regards to the path of policy” in the press conference. Undetermined by political pressure, the Fed is trying to engineer a soft landing for the US economy as it prevents it from overheating while at the same time giving itself more room for any rates cuts if the economy sours in the future. The probability of a December hike remains high at approximately 90% after the meeting. Nothing major in terms of news or reports coming out of Japan during Wednesday and Thursday's sessions.

Technical Analysis

Apparently investors interpreted the Fed to be dovish, as a downward move was seen for the Dollar/Yen after Wednesday's FOMC and this bearish move continued during the early hours of today's session. During Thursday's session the pair will continue its bearish move towards the 112.54 figure where it might break that figure and continue further downwards in the direction of the 112.42 area. During Today's session the USD/JPY seems to be a strong sell.

Support: 112.54 112.42
Resistance: 112.87 112.98

Chart (H1)