What’s Next For USD?
Anna Coulling | Jul 27, 2016 10:05AM ET
As the markets wait on the Fed, it's the US dollar that is on center stage, a position that will be taken by the Japanese yen toward the end of the week. For the currency of first reserve, much will depend on the tone of the Fed's statement. And with interest rates are likely to remain where they are, it will be the degree of hawkishness that ultimately dictates market direction for the USD.
h3 The Technicals/h3From a technical perspective, the daily US dollar index remains bullish, with the 12,110 area being tested once again in early trading, after the index recovered from Tuesday’s losses to trade at 12,092. Wednesday morning’s price action is also building a solid platform of support in the 12,065 area, with a much deeper region below in the 12,020 area, both of which should combine to prevent the index falling much in the event of any short-term reaction to the news. For the longer term, if the 12,110 level is breached following the release, then we can expect to see further upside momentum with for the USD moving higher to test the February 12,200-high.
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