Dollar remains at the back foot on Omicron fears, but hawkish Fed partially offsets pressure
|The pair remains in red for the fifth straight day and attempting to close below key Fibo support at 113.07 (38.2% retracement of 109.11/115.51upleg) after three consecutive failures.
The sentiment remains negative, mainly on strong Omicron uncertainty, although several other factors work in favor of the US dollar.
Hawkish comments from Fed Chair Powell on Tuesday boost expectations for rate hike, while solid US private sector jobs data add to positive signals, as markets await Friday’s release of non-farm payrolls data for November and expect that the US central bank would speed tapering in their Dec 15 policy meeting.
Daily techs remain mixed as bearish momentum continues to rise and faster DMA’s (10/20/30) turning into bearish configuration, while stochastic is about to reverse from oversold zone, lacking clearer direction signal.
Fresh bears off 2021 high, face strong headwinds from 113.07 Fibo level (reinforced by rising 55DMA) but so far holding grip, awaiting more signals from US jobs data on Thu/Fri (weekly jobless claims / NFP).
Eventual close below 113.07 pivot would signal bearish continuation and open way towards 112.31/00 (50% retracement / round-figure), violation of which would expose next key level at 111.56 (Fibo 61.8% / 100DMA).
Conversely, repeated failure to register close below 113.07 would signal prolonged consolidation, but bears will remain in play as long as the price action stays below 114.00 zone barriers (converged falling 20/30 DMA’s).
Res: 113.07; 113.62; 114.00; 114.80
Sup: 112.53; 112.31; 112.07; 111.56
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