FED meeting minutes and USD preview!
Reading the latest meeting minutes of the Federal Reserve confirms that several policymakers would agree to reduce the pace of asset purchasing "at some point" if the economic recovery goes well. Publishing the meeting minutes helped the USD Index jump above 90.25, from yesterday`s low of 89.68. However, it did not take long and eased after FED-minutes fuel run out of steam earlier today in the Asian season.
So far in today`s trading hours, USD Index eased 0.10% to touch 90.10. According to the meeting minutes, FED will slow down asset purchasing faster than market expectation due to faster inflation. This comment was surprising for market participants, as many investors believed that FED would hold the rates and monetary policy for a predictable time despite the robust economic data.
"The Fed minutes might end the recent period of dollar weakness for now, but it is still too early for a trend reversal," Commerzbank (DE: CBKG) strategists said in a daily note. This comment probably will help the USD to gain a bit again from its loss. In past weeks, USD lost its rate, as FOMC members refused any Hawkish policy or rate increasing. And now, with revealing the honest opinions of members, the market needs an adjustment, and it will probably take few days.
Against the US dollar, the Aussie was the primary beneficiary as the better than expected employment data helped the Australian dollar gain 0.4% so far today. The pairing is currently trading at 0.7752. Pivot point sits at 0.7740, and trading above this level still supports the uptrend in the short term; however, as we expect market adjustment for the US dollar, the uptrend fundamentally can not continue so far.
USD technical review
Technically, us dollar intraday trading signaling of side movement with downtrend desire. RSI at 50 can not confirm enough strength for a down or uptrend to continue the way. OBV trend line started side movement after pausing the uptrend. And the price is between the 20 and 50 HMA lines. 89.87 (S1) is the critical level that confirms the downtrend for a more extended period, needs to breach this level. On the flip side, the first resistance at 90.36 is where the uptrend can get back its power to touch higher levels.
