April 10, OctaFX – Ahead of the FOMC minutes, the greenback, tracked by the US Dollar Index (DXY), is struggling for direction on Wednesday although it manages to keep the trade around the key 97.00 mark.
US Dollar Index focused on FOMC minutes, trade talk
The index is fading the initial optimism seen during the Asian trading hours and has now returned to the 97.00 handle, navigating the lower end of the range after hitting 97.50 during last week.
In the meantime, the greenback paid little attention to news citing the potential US sanctions against EU products, as per yesterday’s comments (threats) by President Trump.
Moving forward, investors expect today’s FOMC minutes to come in on the dovish side, while attention will also be on whether consumer prices managed to pick up some convincing traction during last month.
What to look for around USD
DXY keeps tracking the broad risk appetite trends while headlines coming from the US-China/US-EU trade fronts also collaborate with the price action. In addition, positive results in the US calendar have been also fuelling the upside in DXY to 97.00 and beyond in past sessions.
Today’s FOMC minutes are expected to shed details on the potential discussion of a re-assessment of the Fed’s monetary policy, particularly any mention of probable rate cuts if the outlook deteriorates. Market participants, in the meantime, continue to adjust to the prospects of no hikes from the Fed this year and just one probable rate raise in 2020.
Additionally, the buck’s safe-haven appeal and widening rate differentials vs. its peers keep propping up the underlying constructive bias in the index.
US Dollar Index technical outlook
At the moment, the pair is retreating 0.04% at 96.98 and faces initial contention at 96.84 (21-day SMA) seconded by 96.62 (55-day SMA) and finally 95.74 (low Mar.20). On the other hand, a break above 97.52 (high Apr.2) would expose 97.71 (2019 high Mar.7) and finally 97.87 (monthly high Jun.20 2017).
This article was provided by OctaFX. It should NOT substitute for professional marketing consulting. Forex margin trading involves substantial risks. Forex margin trading exposes participants to risks including, but not limited to, changes in political conditions, economic factors, and other factors. All of which may substantially affect the price or availability of one or more foreign currencies.