There was a little bit of a cheer in danger sentiment initially because the Fed hiked by 25 bps and roughly hinted that they’ll transfer to the sidelines after. Nevertheless, Powell did not persuade on that entrance and markets began to get angsty once more because the mud settled. By the top of the day, it was very a lot a risk-off wave that struck however the greenback was additionally subdued.

USD/JPY specifically noticed a over 1% drop again underneath 135.00 and is retaining that method for now:

The break beneath 135.00 sees sellers regain near-term management with scope to increase the draw back transfer in direction of the 100-day transferring common (purple line) subsequent at 132.83.

There are additionally some key technical ranges at play elsewhere, similar to that for EUR/USD, GBP/USD, and notably gold. However I will get to them individually later within the day.

For now, the overview for the greenback is that markets are fearing an additional hit to US regional banks and that is not serving to. Not solely that, there’s additionally the entire debt ceiling problem that’s beginning to come extra into focus as effectively.

Sometimes, you’d anticipate the buck to profit primarily based on the greenback smile idea, particularly in instances the place there’s broad danger aversion in markets. However that is not proving to be the case, at the least not in the interim.

Nevertheless, I would not rule out that risk however on the similar time, it’s a must to respect the technicals so there’s that to think about.