Dollar Index outlook: Lacks direction signals in post-Fed trading
|US Dollar Index
Wide post-Fed swings signal that the dollar is still looking for direction, as long-tailed Wednesday’s candle and long upper shadow forming today, support scenario of extended directionless mode.
Short-lived spike below psychological 100 support (hit 14-month low in immediate reaction to Fed’s decision) was followed by rise to one-week high, which failed to sustain gains, keeping the price within a range.
Confronting signals from a jumbo rate cut and renewed narrative of soft landing, due to still resilient economy, keep the dollar on hold for now.
On the other hand, daily studies remain in full bearish setup and contribute to signals of continuation of larger downtrend, after recent correction (100.38/101.79) was completed.
However, bears need to register a weekly close below 200WMA (100.33) and clear break below 100 level, to open way for extension of the bear-leg from 105.78 (Jun 28 high), towards a higher base at 99.20 zone (July 2023) and Fibo support at 98.92 61.8% of 89.15/114.72 uptrend).
Near-term action is expected to remain biased lower while holding below converged descending 10/20DMA’s (100.91/101.01).
Res: 100.91; 101.01; 101.37; 101.79.
Sup: 100.00; 99.86; 99.20; 98.92.
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