US Dollar Index looks to rebound from 96.40, FOMC eyed
The greenback, in terms of the US Dollar Index (DXY), is attempting a rebound to the mid-96.00s after briefly testing fresh 3-week lows near 96.30 on Tuesday.
US Dollar Index focused on FOMC
The index keeps the neutral theme unchanged in the area of 3-week lows around 96.40/50 so far today, as market participants remain cautious ahead of the FOMC event later today.
The broader risk-appetite trends keep dictating the sentiment in the global markets, although extreme low volatility persists and forces the buck to trade within a tight range in past sessions.
Looking ahead, the Federal Reserve is expected to keep the Fed Funds target range unchanged today, while all the attention should be on the revised forecasts for growth, inflation and employment as well as the fresh ‘dots plot’.
In addition, the EIA will publish its weekly report on US crude oil stockpiles.
What to look for around USD
The optimism around a positive outcome in the US-China trade front faded somewhat in past days, although investors seem hopeful of a final agreement at the end of the day. On another front, US inflation seems to be losing some traction while activity remains strong, adding to the ongoing debate on whether the Fed should re-assess its next steps of its monetary policy, particularly regarding rate hikes. The occasional resumption of the upside in the buck, however, carries the potential to spark fresh bouts of criticism from President Trump to both the Fed’s policy and the level of the currency.
US Dollar Index relevant levels
At the moment, the pair is advancing 0.04% at 96.45 facing the next hurdle at 96.63 (21-day SMA) seconded by 96.80 (10-day SMA) and finally 97.71 (2019 high Mar.7). On the flip side, a break below 96.29 (low Mar.19) followed by 95.89 (200-week SMA) and then 95.82 (low Feb.28).