Japanese Yen consolidates post-Fed losses. remains capped below 5-DMA

Chart - Courtesy Trading View

Fundamental Overview:

On Wednesday, the US Federal Reserve (Fed) raised key rate by 75 bps, Fed’s biggest hike since 1994.

The central bank also revised inflation forecasts for this year and the next while cutting down the inflation expectations.

Further, the policymakers also signaled either a 50 bp or 75 bp rate hike in the next meeting.

On the data front, US Retail Sales marked a contraction of 0.3% MoM versus an anticipated growth of 0.2% and downwardly revised 0.7% in previous readings.

Also, the NY Empire State Manufacturing Index dropped to -1.2 compared to 3.0 market consensus and -11.6 prior.

Focus now on the housing and activity data from the US along with Fed Chair Jerome Powell's speech for impetus.

Spot Analysis:

USD/JPY was trading 0.47% higher on the day at 134.42 at around 06:50 GMT.

Previous Week's High/ Low: 134.55/ 130.42

Previous Session's High/ Low: 135.59/ 133.50

Technical Analysis:

- USD/JPY consolidates previous session's slump

- Momentum is bullish, volatility is high

- Upside remains capped at 5-DMA

- Retrace has bounced off 200H MA

Major Support and Resistance Levels:

Support - 133.71 (200H MA), Resistance - 136.98 (Upper BB)

Summary: USD/JPY trades with a bullish bias. Breach below 200H MA could drag the pair lower. Bullish invalidation only below 21-EMA.