USDOLLAR at Support Ahead of Critical Fed Meeting- All Eyes on Yellen
- USDOLLAR vulnerable heading into FOMC
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
- USDOLLAR testing median-line support ahead of FOMC
- Resistance confluence at 12028 backed by 12050- broader bearish invalidation
- Support targets at 11942 backed by 11928 & 11906
- Daily RSI holding sub 60- bearish
- Key Event Risk Ahead: FOMC Rate Decision & Subsequent Janet Yellen Presser
Notes: The Dow Jones FXCM U.S. Dollar Index continues to trade within the confines of a well-defined descending channel formation extending off the monthly high with near-term short bias in focus. Key interim support rests lower at the confluence of the 50% retracement, the1.618% extension & channel support at 11936/42 with a break below this region targeting the 100-day moving average at 11928 & the key 61.8% retracement at 11906.
The immediate short-bias remains in play while below the weekly open at 11989 with a breach above the monthly open at 12028 (bearish invalidation) needed to shift the focus back to the long-side. Such a scenario targets subsequent resistance barriers into 12050 & the reversal-day close at 12071.
Added caution is warranted heading into tomorrow’s highly anticipated FOMC interest rate decision with consensus estimates largely mixed amid the ongoing slack in the real economy. The lackluster data coming out of the U.S. may continue to undermine Fed expectations for a faster recovery and a marked downward revision in the growth, inflation and interest rate forecasts may further erode the bullish USD outlook.
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Relevant Data Releases
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---Written by Michael Boutros, Currency Strategist with DailyFX
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