US Dollar Index outlook: Bulls take a breather under 20-year high ahead of Fed minutes

Slobodan Drvenica Windsor Brokers

US Dollar Index

Bulls are taking a breather under new two-decade high, following Tuesday’s 1.3% rally, sparked by fresh risk aversion on recession fears, while the greenback remains underpinned by expectations aggressive Fed, as the US central bank has more opportunities to continue policy normalization than other major central banks.

Markets are taking a breather ahead of release of FOMC June policy meeting minutes later today, which are expected to provide more clues about the central bank’s tightening path, with markets betting on Fed’s increasingly hawkish stance.

Profit-taking on stretched conditions is expected to push the price to the better levels to re-join bullish market.

Immediate support lays at 106.06 (broken upper 20-d Bollinger band) which so far holds today’s action, with more significant points at 105.54 (former top of June 15) and 105.04 (former top of May 13) and parallel-running ascending 10/20DMA’s at 104.76/50 respectively (also Fibo 61.8% of 103.18/106.56 upleg), where dips should find solid ground.

Res: 106.56; 106.81; 107.60; 108.47.
Sup: 106.06; 105.54; 105.04; 104.76.

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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