FxWirePro: USD/JPY consolidates previous session's slump, less hawkish-than-expected Fed dampens US dollar

Chart - Courtesy Trading View 

USD/JPY was trading 0.21% higher on the day at 129.33 after closing 0.83% lower on Wednesday's trade.

U.S. Federal Reserve raised interest rates by 50 basis points but sounded less hawkish than expected, lifting investor sentiment and sending the dollar lower.

Fed Chair Jerome Powell said policymakers were ready to approve similar-sized rate hikes at upcoming policy meetings in June and July.

Powell added that the Fed was not "actively considering" a 75 basis-point rate hike, tempering some market expectations for an aggressive tightening path.

5-DMA has turned south, price action slips below 200H MA on the intraday charts. Bearish RSI divergence adds to downside bias.

Stochs and RSI are on verge of bearish rollover from overbought levels and Chikou span is biased lower.

Major Support Levels: 

S1: 129

S2: 127.81 (20-DMA)

Major Resistance Levels: 

R1: 129.70 (5-DMA)

R2: 131.46 (Upper BB)

Summary: USD/JPY is set to see minor weakness on account of technical correction. Overbought oscillators and Bearish RSI divergence add to the downside bias. Scope for dip till 21-EMA at 127.49. Major trend still remains bullish, that said, breach below 21-EMA could change near-term dynamics.