The USD/JPY is losing ground at a rapid pace after a failure to reclaim the 137.40 levels. The pair spiked higher post the 75bps rate hike by the US Federal Reserve but as the press conference went on with clues on the risk of potential recession the pair started losing ground with risk aversion kicked in. As of writing the pair has broken through the tough 136.00 barrier and is at 135.40 with bears looking to break the 135.00 levels.
DXY was heavily dumped by traders post the rate hike. A downside break of the rising channel chart on the H1 chart has weakened the greenback bulls. There is more downside pressure in store as safe haven demands have assisted the Yen. On the other hand, XAU/USD pair as reclaimed the $1730 mark looking for more gains with the greenback under pressure.
The downside reversal was mainly triggered once bulls were not able to sustain above the 200 EMA at 137.18 which triggered a massive sell off. With RSI indicators moving below 40.00 the bears seem to be in control.
Technically, a minor pullback may be expected if the RSI indicators move towards oversold conditions but overall, the bearish reversal will hold. If bulls are able to hold off the psychological 135.00 support, there would be more buying from the support.