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USDX Technical Outlook ahead of FOMC

USDX Technical Outlook ahead of FOMC

The USD is trying to find its feet again as the slide from last Friday shows further signs of stabilizing broadly. Let’s take a look at the USDX Technical Outlook ahead of FOMC

15 March, AtoZForex -The USD traded higher against most of its G10 peers on the first trading day of the week.  At current levels, U.S dollar remains broadly bullish but concede that a lot of good news is priced into the USD already. A positive message from the Fed on the outlook for the economy and rates is needed to lift USD sentiment from here. Expect major currencies to mark time in ranges ahead of the Fed later today.

Today and next two days feature a non-stop schedule of trading risks. These plethoras of economic events will, no doubt bring about a strong volatility. FOMC decision, the Dutch election, data on US retail sales and CPI are some of the high events scheduled for the week.

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The underrated risk might be the US economic numbers. Retail sales have been one of the few soft spots so far in 2017. Betting on 3 or 4 Fed hikes this year invariably means betting on a strong pickup. The same goes for inflation, which is forecast to rise 2.2% y/y excluding food and energy.

The Fed decision itself is largely a non-event. They will hike rates but those data points could affect the statement and how Yellen communicates in the press conference. They may also raise concerns in the markets or solidify the excitement about a pickup in growth.

USDX Technical Outlook ahead of FOMC

USDX Technical Outlook ahead of FOMC USDX D (Click to zoom)

Looking at the daily technical perspectives of the U.S. dollar index (USDX), the price is in a bullish territory ahead of the major event. It’s trading above its 100-Day Moving Average, also bouncing off the bottom of a rising wedge. Chasing weakness here is totally not recommended. Oscillators also align bullishly supporting the engulfing price action spotted, after Monday’s close. However, an alternate scenario could be considered on a break and close below the 100-Day Moving Average currently seen to be bullish supportive.

What is your view on USDX Technical Outlook ahead of FOMC? Please share your view in the comments section below.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ, nor should they be attributed to AtoZMarkets.

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