- The Federal Reserve raises interest rates by 75 basis points.
- The dollar rises but then crashes at the start of Powell’s press conference.
The USD/JPY fell below 134.00 and hit a fresh daily low at 133.78 as Fed Chairman Powell made his first remarks at the post-FOMC meeting press conference. The central bank raised the key interest rate by 75 basis points.
The dollar initially appreciated across the board, but then pulled back sharply, erasing gains within minutes. Stocks rallied sharply to new highs, while US yields turned lower.
The Federal Reserve raised its target interest rate by 75 basis points, the biggest hike since 1994. In the statement, the Fed said more rates are on the way and warned of rising recession risks.
Chairman Powell does not expect 75 basis point hikes to be common. The pace of interest rate hikes will depend on the data that arrives. He considers that the evolution of inflation justifies a higher rise in the June meeting. The dollar fell after his comments. The conference is taking place and continues to be a source of volatility.
Vulnerable while below 134.50
USD/JPY four-hour chart is sloping lower. A USD/JPY consolidation below 133.50 would point to an extension of the correction, with the next support coming in at 132.90. To the upside, immediate resistance is at 134.40/50 and above it at 135.00.
Technical levels
Source: Fx Street
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