USD/JPY: Bulls exhausted after Fed-led rally, eases to 117.20

The USD/JPY pair is seen moving away from post-Fed rally to fresh ten-month highs, now looking to test 117 handle amid a broad based retreat in the US dollar, as dust settles over the hawkish Fed decision/ statement.

USD/JPY hits 10-month highs at 117.86

The dollar-yen pair closely tracks the price action seen around the greenback against its major peers, now reversing gains in tandem with the USD index, as the bulls take a breather before the next push higher. The major is last seen changing hands at 117.29, still up +0.22% so far.

The USD/JPY pair also pares gains on the back of a renewed risk-aversion wave that gripped the markets and sent the Japanese stocks sharply lower, thereby boosting the safe-haven flows in the yen.

The major rallied to fresh ten-month peaks at Tokyo open, after the Asian traders hit their desks and cheered Fed’s rate hike decision and hawkish Dots plan, pointing towards a faster pace of tightening in the year ahead.

With the FOMC decision out of the way, next of note for the major remains the US CPI figures slated for release in the NA session. While the next big event for the major remains the BOJ policy meeting scheduled next week.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 117.86 (10-month high). A break above the last, the major could test 118.04 (daily R1) and 118.50 (psychological levels) beyond the last. While to the downside, the immediate support is seen at 117 (round number) next at 116.39 (daily pivot) and below that at 116 (5-DMA).