FXstreet.com (London) - USD/JPY had remained well bid in the opening of the European session but has since shed some 60 pips to the downside.

USD/JPY reached a high of 98.34 as traders propelled the dollars broad based onslaught. But it doesn’t really take Einstein to tell us again what goes up, must come down – does it? Most likely not, as indicated with the stops being placed and some that will have been triggered there below the figure. To re-iterate, the pair has recovered from the recent correction in the Yen with the statements form the FOMC overnight. While there were no changes to the current pace of QE, a comment was made as follows: "the downside risks to the outlook for the economy and the labor market as having diminished since the fall”, which sent the market in a ‘risk-off’ flurry again in broad based dollar rally. In all, the statement was a little more upbeat on the economy but showed little concern about inflation, except there being a more upbeat unemployment rate which might bring in a rate hike in a little closer.

USD/JPY capped

Karen Jones, analyst at Commerzbank explained only an unexpected rise above the resistance line at 98.95 would
neutralise their outlook and imply another test of the 103.74 May high. They note that the 20 and 55 day moving averages have crossed over and these offer additional resistance above the market at 99.06/14.