US Dollar's Price Action Driven by Allegations of US-Japanese Coordination

The US dollar's price action has been driven by several key factors this week, including allegations of US and Japanese coordination that led to a breakdown in USD/JPY. The pair initially reversed aggressively as buyers jumped in at support after the Fed announcement, but selling began to show on Thursday night, with some reports suggesting intervention from Japan.

Market hopes for a rate hike from the Fed were dashed, leading to a chaotic second half of the week. Despite this, the DXY basket held well, testing below the 100-level before bouncing back. The EUR/USD pair broke out of a falling wedge and ran up to above the 1.1500 level as USD broke down with the USD/JPY move.

The coming weeks will be crucial for the US dollar, particularly in USD/JPY, which is expected to test the 155 area for a deeper pullback or sell-off. The EUR/USD pair has broken out and is now defending the 1.1500 level.