News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The US Dollar is stronger this morning following yesterday's market volatility. After falling to a nearly two month low below the 90.00 level early yesterday, the $DXY has resurged to a one week high, currently around 90.60. $USD https://t.co/vM9Kuq2tjV
  • Heads Up:🇺🇸 Goods Trade Balance Adv (JAN) due at 13:30 GMT (15min) Previous: $-82.47B https://www.dailyfx.com/economic-calendar#2021-02-26
  • Heads Up:🇺🇸 PCE Price Index MoM (JAN) due at 13:30 GMT (15min) Previous: 0.4% https://www.dailyfx.com/economic-calendar#2021-02-26
  • Forex Update: As of 13:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: -0.06% 🇨🇭CHF: -0.18% 🇨🇦CAD: -0.34% 🇬🇧GBP: -0.61% 🇳🇿NZD: -1.07% 🇦🇺AUD: -1.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/XoinmY8IKD
  • Heads Up:🇺🇸 Core PCE Price Index MoM (JAN) due at 13:30 GMT (15min) Expected: 0.2% Previous: 0.3% https://www.dailyfx.com/economic-calendar#2021-02-26
  • Heads Up:🇺🇸 Personal Spending MoM (JAN) due at 13:30 GMT (15min) Expected: 2.5% Previous: -0.2% https://www.dailyfx.com/economic-calendar#2021-02-26
  • Heads Up:🇺🇸 Personal Income MoM (JAN) due at 13:30 GMT (15min) Expected: 9.5% Previous: 0.6% https://www.dailyfx.com/economic-calendar#2021-02-26
  • Heads Up:🇺🇸 PCE Price Index YoY (JAN) due at 13:30 GMT (15min) Previous: 1.3% https://www.dailyfx.com/economic-calendar#2021-02-26
  • Heads Up:🇺🇸 Core PCE Price Index YoY (JAN) due at 13:30 GMT (15min) Expected: 1.4% Previous: 1.5% https://www.dailyfx.com/economic-calendar#2021-02-26
  • Myth or fact? One thing is for sure, there are a lot of misconceptions about trading. Knowing the difference between common trading myths and the reality is essential to long-term success. Find out about these 'myths' here: https://t.co/EDvQdHfIPm https://t.co/OD2HjojJ9f
DXY Index Remains in Consolidation in Lead Up to FOMC

DXY Index Remains in Consolidation in Lead Up to FOMC

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- The US Dollar continues to ping pong between support and resistance in what is consolidation in an ongoing symmetrical triangle.

- The main draw this week is the December FOMC meeting, and US President Trump is tweeting about it.

- Retail traders are still mostly short the US Dollar, but positioning is shifting in a manner that suggests sentiment may flip soon.

Looking for longer-term forecasts on the US Dollar? Check out the DailyFX Trading Guides.

The US Dollar (via the DXY Index) has made little progress thus far this week, the last full week of the calendar year 2018. But that's not a surprise, one way or the other, as the barren economic calendar on Monday and Tuesday left little reason for traders to make significant adjustments to positioning ahead of the December FOMC meeting on Wednesday.

What to Expect for FOMC Tomorrow

Following speeches by Fed Vice Chair Richard Clarida and Chair Jerome Powell in early-December, as well as the release of the November FOMC meeting minutes, expectations have started to build that the FOMC will slow down its pace of rate hikes moving forward.

Accordingly, attention tomorrow will be on the updated Summary of Economic Projections, where it seems very likely that: (1) 2018 and 2019 growth forecasts could be downgraded, in part due to growing trade war concerns; (2) 2018 and 2019 inflation forecasts could be downgraded, largely due to movement in the US Dollar and energy markets; and finally (3) the glide path for future rate hikes is reassessed, suggesting a slightly slower pace moving forward.

Fed Will Address Gap Relative to Market Pricing

At the September FOMC meeting, policymakers outlined a path of one more 25-bps hike in 2018, three hikes in 2019, and one hike in 2020. However, ahead of the December policy meeting, rates markets are pricing in one more 25-bps hike in 2018, one hike in 2019, and a rate cut in 2020. For the US Dollar to rally, the Fed will need to prove resilient to recent developments, thereby suggesting markets are underpricing the risk of future hikes. Otherwise, the base case scenario of a ‘dovish hike’ doesn’t seem ready to help the US Dollar rise any further.

DXY Index Price Chart: Daily Timeframe (June to December 2018) (Chart 1)

DXY Index Remains in Consolidation in Lead Up to FOMC

As it were, the symmetrical triangle in place since the end of November remains the central focus. For bulls, the November 28 bearish outside engulfing bar at 97.54 would need to be overcome to validate a bullish breakout. Conversely, given that the December 10 bullish outside engulfing bar's low came in at the daily 50-EMA - a level of trend support tested and held on numerous occasions since first breaking above it on September 27 - validation for a bearish breakout would need to come in below 96.36. For now, we have no bias as to which way the triangle breaks.

Read more: FX Week Ahead: UK & Canadian CPI; FOMC, BOJ, & BOE Meetings

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES