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Assessing the USD Index after the FOMC Statement

The FOMC statement today was nothing surprising. It acknowledged the improvements in the labor and housing markets, but maintained that inflation - the lack thereof- was a deterrent to raising rates. Still, a year-end rate hike is on the table. 

The USD had some mixed reactions. When we look at the USD Index, we can see that price action is tenuous ahead or the statement, and became very quiet afterwards.

USDX 1H Chart 7/29

(click to enlarge)

As we can see in the 1H chart, the USD/JPY has been in somewhat of a bearish correction. Although price rallied from around 96.30 this week, it could not push above 97.00. Then, ahead of the FOMC statement, price already below below a near-term rising speedline, threatening to continue the short-term downtrend. 

Now, if the USDX closes the 7/29 session below 96.55, it is likely still in a period of consolidation/bearish-correction in the short-term. A break above 96.85 however should first threaten the 97.00 handle. Above that, we might see a push towards at least the July high of 98.15.

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