Yesterday we saw a slightly dovish fed statement and economic projection. Forecasts were mostly unchanged, but there were some slight moderation in the rate hike projection. It just sounds like the Fed is not confident about being able to raise rates by September, though it is still possible. The market reacted with a clear USD sell-off. The USD/JPY for example made an about face from a previous bullish attempt.USD/JPY 1H Chart 6/18 (click to enlarge)The 1H chart shows that the market was in a bullish breakout ahead of the Fed statement. But after the Fed failed to instill confidence of a rate hike in September, the USD/JPY reversed sharply. Price is about to test the 122.45 low, with strong risk of breaking lower. In the daily chart, we can see that even if the USD/JPY is to remain bullish in the medium-term. there is short-term downside risk towards the 122 level, and then the 120.84-121 area. These two levels represent the resistance of a previous multi-month consolidation period and should be treated as potential support factors. USD/JPY Daily Chart 6/18(click to enlarge) Look for support also if the RSI approaches 40. If we see price hold and the RSI turn up from around 40, we should expect a bullish continuation attempt. After all, despite the uncertain FOMC rate hike, its policy stance is still hawkish relative to BoJ's stance.