Forex Morning Briefing
Commentary: USD continues to struggle. PE
The US Dollar (.DXY) Index at 89.162 dipped again from marks seen Tuesday, and is trading in the 89.10-89.20 range. The markets is cautious ahead of the FOMC meeting announcement, and it will be interesting to see whether the Fed sticks to a hawkish tone or switches to a dovish tone in light of recent positive economic data from the US. In case of continued hawkishness, expect .DXY to again test resistance at 89.5.
EUR (Euro) at 1.2427 gained some strength after it was reported that the Eurozone economy has had its best growth year in 10 years. If the Bullish sentiment persists and the FOMC meeting does not affect USD’s strength positively, we could see the single currency move up to test resistance at 1.2475. In case of .DXY strength a quick fall to support 1.2275-1.25 could happen.
USD/JPY ate 108.89) is below 109 as it waits to see the FOMC’s stance. The Bank of Japan had raised the inflation outlook for Japan to ‘stable’ in its January meeting prompting traders to expect policy tightening this year. The next target on the Northside is near 109.5.
EUR/JPY at 135.31 is up, as the EUR has seen strengthening on better economic data. Should EUR continue to gain strength, we might just see EUR/JPY staying above 135 in here. There is support near 135.0-135.2 on the daily, 3-Day and weekly lines which could hold for now.
Sterling (GBP) at 1.4165 has also strengthened Vs USD. It is trading near resistance at 1.42. If USD strengthens Vs all currencies near term, we should see this resistance hold.
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