DXY: Mixed ahead of Fed rate meeting – OCBC
|US Dollar (USD) traded mixed this morning ahead of the much anticipated FOMC meeting this Thu (3am SGT). A 25bp cut is more or less a done deal (markets pricing ~93% probability of a cut) but the focus is on the refreshed dot plot, which will provide guidance on Fed members’ expectation on rate cut trajectory into 2025 - 26. The previous dot plot back in Sep guided for 4 cuts and markets are now pricing in about 3 cuts. DXY was last at 106.81 levels.
DXY above the ‘head’ can nullify the H&S pattern
“Bearish momentum on daily chart faded while RSI fell. Head and shoulders (H&S) pattern remains intact with DXY trading near second shoulder. A rise in DXY back above the ‘head’ would nullify the H&S pattern.”
“But at point of writing, DXY is respecting the second shoulder. We watch price action. A play-out of the H&S pattern requires a decisive break below neckline support. Next support at 106.20/50 levels (23.6% fibo, 21 DMA), 105 levels (38.2% fibo retracement of Sep low to Nov high, 50 DMA). Resistance at 107.20 (both shoulders), 108 (2024 high).”
“This week brings empire manufacturing, prelim PMIs (Mon); retail sales, IP (Tue); housing starts, building permits (Wed); FOMC, GDP, existing home sales (Thu); core PCE, personal spending, income, Kansas City Fed manufacturing index (Fri).”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.