Dollar comes under increased pressure after dovish Fed minutes
|The dollar index came under increased pressure on Thursday after overall soft US data and dovish Fed minutes further soured the sentiment that resulted in gap-lower opening and fresh extension to seven-day low.
The dollar remains firmly in red against the basket of major currencies and eyeing key near-term supports at 105.15 (Nov 15 spike low, reinforced by 200DMA) and 104.95 (Fibo 38.2% of 89.15/114.72 ascend), loss of which would signal further significant drop.
The US central bank softened its stance after aggressive period of policy tightening, signaling a 0.5% hike in December (following for consecutive 75 basis points hikes) and possible 0.25% raise in the first meeting next year.
The policymakers are satisfied with results from the tightening phase as inflation generated initial signal of peaking and started to ease, but also with strong labor market that ease concerns about the pace of tightening and allows policymakers to take a breather after the recent wave of a massive hikes.
Technical studies are bearish on daily chart, with additional negative signal seen from formation of reversal pattern on monthly chart (the index was down over 5% this month).
Res: 107.41; 107.88; 108.81; 109.48
Sup: 105.15; 104.95; 104.49; 103.85
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.