FxWirePro: Fed's consecutive 75 bps rate hike fails to impress USD bulls, USD/JPY slumps to hit 3-week low

Chart - Courtesy Trading View 

USD/JPY slumps over 0.95%, hits three week lows at 135.09 before trimming some losses to trade at 135.27 at around 03:35 GMT. The Federal Reserve's consecutive rate hike by 75 bps has failed to support the US dollar, which remains depressed after Jerome Powell's comments. 

On Wednesday, the US Federal Reserve (Fed) matched market expectations with a 75-bps rate hike. Further, the Federal Reserve Chairman Jerome Powell’s speech signaled that the hawks are running out of fuel. Powell said that the rates had reached neutrality, and there won't be any more forward guidance, and that rates will be decided meeting by meeting.

Commentary from Federal Reserve (Fed) has confirmed a slump in retail demand, weighing on the US dollar. US Consumer Confidence also dropped to the lowest since February 2021 to 95.7. 

Focus now on US Gross Domestic Product (GDP) data for further impetus. A preliminary estimate for the US GDP data is 8% against the prior release of 8.3% on a quarterly basis. While the annualized figure is expected to improve to 0.4% vs. -1.6% prior.

Technical Analysis:

- USD/JPY slumps below 21-EMA, eyes 55-EMA support at 133.84

- Momentum is bearish, Stochs and RSI is strongly bearish, RSI is well below 50

- Bearish RSI divergence on the daily charts adds to the downside bias

- Price action is below 200H MA and 5-DMA is biased lower

- GMMA indicator shows major and minor trend have turned bearish on the intraday charts

- MACD and ADX support downside in the pair

Major Support Levels: 134.69 (Lower BB), 134.15 (50-DMA), 133.84 (55-EMA)

Major Resistance Levels: 136.49 (21-EMA), 136.85 (20-DMA), 137.35 (200H MA)

Summary: USD/JPY trades with a bearish bias. The pair is on track to test 55-EMA at 133.84. Breach below cloud will plummet prices further.