(Bloomberg.com) The Federal Reserve left interest rates unchanged while saying risks to the U.S. economy have subsided and the labor market is getting tighter, suggesting conditions are getting more favorable for an increase in borrowing costs.“Near-term risks to the economic outlook have diminished,” the Federal Open Market Committee said in its statement Wednesday after a two-day meeting in Washington, before repeating language from June that the panel “continues to closely monitor” inflation and global developments. Job gains were “strong” in June and indicators “point to some increase in labor utilization in recent months,” the Fed said. (Full article on Bloomberg.com)Official Fed StatementEssentially, the FOMC did nothing. But its language can be interpreted as relatively more hawkish than its previous statement. Some might take the language to suggest an increased likelihood of a rate hike in September. Despite being relatively hawkish, the FOMC statement did not push the USD higher. Let's take a look at USD/JPY, EUR/USD, and USD/CADUSD/JPY 1H Chart 7/28(click to enlarge)Cautious retreat:- The USD/JPY had an initial reaction to the upside after the FOMC statement.- 106.00 held as resistance and the pair slid. - The weak decline suggests a possible bullish reversal.- Indeed, the latest bullish swing to start the week pushed the RSI above 70, which suggests the start of bullish momentum. Now, if the RSI can hold above 40, that bullish momentum would still be in play. EUR/USD 1H Chart 7/28(click to enlarge)Strong reversal:- I was bearish on EUR/USD before the FOMC statement. - However, if you looked at other usd-crosses, you would have seen that the euro was still resilient.- The bearish outlook should be shelved now after the FOMC-reaction which initially went south to almost 1.0960 before rebounding to almost 1.1120 by the 7/28 US session.- In the short-term, I think EUR/USD has upside to a common resistance from late June and throughout July - 1.1170-1.1185 area.- In terms of trading, I would only consider buying on a dip and putting a stop below 1.10. A buy around 1.1050 with a risk of 70 pips and a potential upside of almost 135 pips offers almost a 2:1 reward to risk. USD/CAD 1H Chart 7/28(click to enlarge)Bulls still in Charge:- The USD was strong against the CAD this week. The decline in oil prices pressured the CAD. - Before the FOMC event, we did see USD/CAD consolidate and retreat. - After an initial rally, the pair retreated after the FOMC announcement. - We are seeing support at the 1.31 handle, where price bounced off the 200-hour simple moving average (SMA). - The USD/CAD still looks bullish despite the last few days of consolidation. - The first resistance will be just below 1.32, around 1.3185. - Then there is upside to 1.3250. - A break above 1.3250 should open up the next target around 1.34.