Important Retest of Daily 8-EMA Unfolds for the USDOLLAR Index
- EUR/USD sustaining move lower, but inverse H&S possible on H1 timeframe.
- Like EUR/USD, broader USDOLLAR has maintained daily 8-EMA on a closing basis since October 22.
- See the November forex seasonality report that forecasts US Dollar strength.
With four central bank speeches on the calendar (technically five, but Fed Chair Yellen's opening remarks hardly constitute a noteworthy speech on monetary policy), some light will be shed on several Federal Reserve policymakers' thinking as investors toy with the notion of a December rate hike.
Of the four speakers today, we're keeping our eyes on two in particular: Chicago Fed president Charles Evans and New York Fed president William Dudley. Both of these policymakers are known to be to a bit dovish of center; Evans is known for his insistence on keeping rates low and expanding QE; Dudley is known for falling in line behind the Fed Chair. In both cases, their speeches collectively serve as a litmus test for Fed thinking at present: if these policymakers are optimistic about raising rates, it's very likely that the majority of the FOMC is too.
With the DailyFX economic calendar largely absent of significant US economic data, these speeches will carry significant weight today. The ramifications could be significant, with the USDOLLAR Index trading back to (and thus far holding) its daily 8-EMA, a level it hasn't closed below since October 22.
See the video above for technical considerations in EUR/USD, EUR/JPY, USD/JPY, GBP/USD, AUD/USD, and the USDOLLAR Index.
Read more: EUR/USD, EUR/JPY Eye Further Losses after Flag Breaks
--- Written by Christopher Vecchio, Currency Strategist
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