AUD/JPY loses upside on risk-off

FXStreet (Guatemala) - AUD/JPY has dropped after an initial bid pre and post the Fed's decision to hold off from hiking interest rates too soon while the environment is not appropriate.

AUD/JPY was moving higher from the lows of sideways channel at 86.30/40 and eventually made a high of 87.51. However, the Yen was in demand as equities sold off and AUD/JPY eventually got sucked in while the Aussie started to give back some gains made post the release.

AUD/JPY and FOMC

The Fed left rates unchanged and 13 officials wanted a rate hike in 2015 which was down from 15 officials of previous meeting. The concerns of the global uncertainties are one aspect of why the FOMC decided it was too early, while the 2% target may be jeopardised and they wish to see further improvements in the labour market. Technically, the downside has been opened below the 50 SMA on the hourly at 86.40 although remains in neutral territory above the 20 DMA at 85.27.