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