USD/JPY erases gains for the day as post-Fed reaction weighs

The dollar is lower in European morning trade, as the post-Fed reaction is starting to weigh more heavily now. USD/JPY traded to a high of 143.94 in Asia but has been dragged all the way back down now to roughly flat levels on the day at 143.18.

Looking at broader markets, equities are running higher while bond yields have dropped off from the highs earlier in the day.

In fact, Treasury yields are now pushing to the lowest points for the day now. 2-year yields are down to 3.59% from 3.65% earlier while 10-year yields are down to 3.69% from 3.73% earlier.

Gold is also now sitting higher by 0.8% to $2,579 in hopes of pushing for a test of $2,600 again.

Going back to USD/JPY, the pair is still very much at the mercy of how the rates market is going to move. But the near-term chart above at least shows that buyers are still hanging in there, by the very slightest.

A fall back below both the 100 (red line) and 200-hour (blue line) moving averages will put scrutiny back on the 140.00 mark. So, those will be key near-term levels to watch for the time being.

As for other dollar pairs, GBP/USD looks poised for a retest of daily resistance from the August high of 1.3266 currently. Meanwhile, AUD/USD is starting to challenge a firm break above 0.6800 before aiming a test of the December 2023 high of 0.6871 next.

This article was written by Justin Low at www.forexlive.com.