The US dollar strangely reacted to the Fed meeting. Usually, it rises following hawkish remarks. As seen on the chart, yesterday it sharply divided down. On Thursday morning, the US dollar index broke through the support level of 102, gradually declining.

What was the reason for such an odd reaction? Jerome Powell believes that a soft landing is still possible. It seems that traders have already priced hawkish statements. This is why they had no effect on the greenback.

The US dollar may also lose its safe haven currency status if the banking crisis worsens. Powell assumes that it is still too early to talk about its impact on the US financial system. The US dollar index plunged to a 7-week low due to market uncertainty.

In the Asian session, it was moving in the downward range of 101.9-102.5. Although Jerome Powell is confident about the stability of the banking system, the US dollar could reach new lows in the coming days and even weeks.

The yen, on the contrary, is likely to cement its safe haven currency status. US government bonds lost momentum, logging their biggest weekly drop following the Fed meeting. This is always a bullish condition for the yen.

It tried to break through a 6-week high located below 131 on Thursday morning. The dollar/yen pair performed a corrective rebound in the range of 130.4-131.5. To ensure further upward movement, bulls need to push the pair to a 2-week resistance level of 131.8.

If so, the pair may approach 130.5. The bears may regain the upper hand only if the pair grows to 131.8 and above. This scenario looks likely today as the latest report showed that Japanese manufacturers' mood soured, especially in export industries.

Meanwhile, the bulls took control of the AUD/USD pair. It was moving in the upward range of 0.6680-0.6756. During the Asian session, it hit 0.6730, edging higher. However, in general, the upside potential looks limited.

Its growth is mainly driven by rising oil prices, a strong yuan and the Chinese market. These drivers are not relevant today given that the whole focus is on the results of the Fed meeting. This is why it will be rather hard for the Aussie to break above the resistance level of 0.6760

The New Zealand dollar also has weak bullish momentum, especially after the steep fall in the yuan below the 5-week low of 0.6837. It even tested 6.8200. A drop in the yuan which acts as the liquid proxy for commodity currencies exerted pressure on the Australian dollar.

The Reserve Bank of New Zealand also made rather pessimistic statements. The regulator believes that the 450-basis-point rise in the rate over the past 18 months was still "percolating" through the economy and would likely further weigh on consumer spending.

After a jump yesterday, the kiwi/dollar pair showed moderate growth in the morning. It consolidated in the price corridor of 0.6220–0.6296, trading at 0.6287.

00:00 Intro
00:24 Jerome Powell
01:36 Janet Yellen
02:22 USDX
03:41 USD/JPY
04:48 AUD/USD
05:35 NZD/USD


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