No respite for USD bulls,
- After last week’s sizable sell-off in the USD, it is once again under selling pressure on Monday morning as investors bet that commentaries from the U.S. Federal Reserve at its monetary policy meeting this week would be dovish in nature, where participants are expected to scale back their economic and rate hike projection. Federal Reserve members have projected 2 more rate hikes for 2019, however, the market is pricing none. As a matter of fact, the bond market is attaching a higher probability to a rate cut in 2019 than a hike.
- The 4-hourly chart clearly shows that USD is heading to retest key rising trend line after it supported the bulls last week, whose strength wasn’t enough to break the down-trending line.
- The rising support line has been in place since the end of January and provided the necessary support thrice so far.
USD would face bigger selling pressure should the trend line breaks this week. The dollar index, which is the value of the dollar against a basket of currencies, is currently trading at 96.48, down 0.11 percent for the day, after a 0.75 percent decline last week.
The focus for the week would remain on the U.S. Federal Reserve, and its economic and interest rate projections would decide the next major move in USD.
