Fed Signals Rate CutsThe US Dollar has turned sharply lower through Thursday morning as the fallout from last night’s FOMC meeting continues to develop. While rates were held unchanged, in line with expectations, the Fed caught markets off-guard by signalling that rate cuts are expected next year. The updated dot plot forecast now project three quarter-point cuts through 2024 with Powell noting that the bank had discussed the possibility of easing at this meeting. However, Powell noted that easing discussions were still in very early stages and the Fed would not rule out further tightening if the data called for it.Dot Plot Forecasts in FocusLooking at the breakdown of the dot plot forecasts shows there is plenty of two-way risk for USD in coming months. Eight members currently project less than three .25% rate cuts next year while five forecast more. If data in coming months sees this skew leaning more towards strong easing then USD is likely to be pushed further lower. However, if inflation data started to trend higher again and the skew pulled back in favour of fewer cuts and potentially fresh hikes, this should help support USD. As such, headline data events in coming months will be closely watched, particularly inflation and inflation-related readings.Fed/BOJ DivergenceUSDJPY has come under strong selling pressure once again. With the prospect of the BOJ moving towards policy normalisation over H1 next year, while the Fed begins easing policy, there is highly tradable central bank divergence there which should keep USDJPY pressured near-term.Technical ViewsUSDJPYThe rebound off the 142.03 level failed into a retest of the broken bull trend line with price since reversing lower again and trading back down to test 142.03. If we break below here, focus is on a deeper push towards 137.86, in line with bearish momentum studies readings.