The dollar index rebounded from three-year lows, extended the overnight rally for the third consecutive day. FX traders are waiting for FOMC meeting minutes. The USD continues to be in a down trend driven by multiple factors.
FX reactions: From last week’s low the USD (KTM: USDX) off nearly 1.30% whereas in the same period the USDCAD rose 1.65%, USDJPY rose 1.80% and USDCHF rose 2.0%. Within the emerging market currencies space USDTRY and USDZAR rose 2.00% each and USDHUF rose 2.15%. In Asian currencies CNH down 1.15% and SGD down over a percent against the USD.
In the major currencies basket, EURUSD down 1.90% and GBPUSD down over 1.50%. Crosses AUDUSD down nearly 1.5% and the NZDUSD down 1.35%.
The dollar index manages to hold the 88.00 support level again last week. Since the beginning of the year 2018, the dollar index locked in sideways between 88.00-90.42. In our earlier articles, we pointed that in Q1 the price will stabilize between around 88.00 levels.
Ahead of FOMC minutes support potential supports remains between 88.00 and 87.30.
What’s on today?
The EA manufacturing and service PMI are due on Wednesday. We are particularly interested in the US, February service and manufacturing PMI data are due. UK December UK labor market report is the other risk event scheduled on Wednesday.
The FOMC minutes from the January meeting are due to release as well.
Also read: Bitcoin pauses at the next big resistance
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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