Overnight, the DXY continued to weaken and traded down to the 103-round number support level. However, the price bounced from the level to consolidate at the current level of 103.18.
It is likely that the DXY could continue to consolidate along this level in the lead up to the FOMC interest rate decision due on Thursday morning.
The expectation is for the FOMC to increase rates by 25bps to take the interest rates to 5.00%. This decision is likely to have been priced in. IF the FOMC decides to hold rates, due to the uncertainty in the market due arising from the banking crisis, this could see the DXY drop significantly to the downside.
In addition to the interest rate decision, pay attention to the accompanying statement and the press conference which follows.
A dovish tone, citing concern over the current market turmoil could see the DXY continue to weaken further.
Ultimately, if the DXY trades below 103, the next support level is 102.63. And beyond that, the next key level is at 101.55.
It is likely that the DXY could continue to consolidate along this level in the lead up to the FOMC interest rate decision due on Thursday morning.
The expectation is for the FOMC to increase rates by 25bps to take the interest rates to 5.00%. This decision is likely to have been priced in. IF the FOMC decides to hold rates, due to the uncertainty in the market due arising from the banking crisis, this could see the DXY drop significantly to the downside.
In addition to the interest rate decision, pay attention to the accompanying statement and the press conference which follows.
A dovish tone, citing concern over the current market turmoil could see the DXY continue to weaken further.
Ultimately, if the DXY trades below 103, the next support level is 102.63. And beyond that, the next key level is at 101.55.
