The US dollar has gone sideways in general, but Saul buyers jump into the marketplace after the CPI figures came out higher than anticipated in the United States. This suggests that the Federal Reserve will be more hawkish than dovish during the statement today, and that of course is good for the US dollar longer term. I recognize that there is a significant amount of resistance at the 114.50 level above, stretching to the 115 handle. If we were to clear that level, the market could go much higher, perhaps reaching towards the 120-level next year. It’ll be interesting to see what the Federal Reserve has to say, because if they are more hawkish than anticipated, that will change the outlook for a lot of currency pairs, stock markets, and of course bonds.
Alternately, if the market roles over based upon a dummy statement, that could change everything in this pair, and we can find the market looking towards the 112-level underneath, which is massively supportive. The volatility in this market will be rather strong, as these interest rate statements have a massive effect on the pair typically, and of course we are trying to form a base in a potential trend change. That is always a noisy affair, so I think that regardless, we will see choppiness but as things look right now, it appears that the buyers are trying to flex their muscles. However, by midafternoon New York time tomorrow, we will have more clarity.
Written by FX Empire