US dollar drops as Fed cuts rates to zero in emergency meeting

DXY on the backfoot as markets step away from the dollar post Fed cut.
News also sent futures on the S&P 500 Index to fall about 5%.
Bears can targe a 50% retracement on the March rally.

Ross J Burland FXStreet

The US dollar is lower across the board following a move by the Federal Reserve to not only lower the cost of the dollar on swap lines, but by slashing rates to zero in lieu of the scheduled meeting this week. The dollar lost ground in the DXY on Friday, -0.89 and is set to fall lower considering the moves in early Asia on Monday.

The Fed cut its key interest rate by a full percentage point to near zero and said it will boost its bond holdings by $700 billion. These are massive easing in policy in an emergency move, sending EUR/USD to test fall just 1 pip shy of the 1.12 handle, GBP/USD onto the 1.24 handle, USD/JPY down by nearly 2% and AUD/USD to test the 0.63 handle.

The news also sent futures on the S&P 500 Index to fall about 5%, hitting limits on trading, after stocks climbed more than 9% on Wall Street Friday, recouping most of their 10% plunge the previous day.

Bears on track for a 50% retracement

The start of the week's developments bring a more aggressive Fed response to the table and exposes the DXY to further losses. We are still in a massive unwind stage which could continue to support the euro which makes up the largest part of the DXY. A downside move below 23.6% Fibo retracement target at 97.80 comes as 96.60 for a 50% Fibonacci retracement level.

DXY levels

Dollar Index Spot

Overview
Today last price	98.48
Today Daily Change	0.00
Today Daily Change %	0.00
Today daily open	98.48

Trends
Daily SMA20	98.01
Daily SMA50	97.93
Daily SMA100	97.79
Daily SMA200	97.82

Levels
Previous Daily High	98.81
Previous Daily Low	97.33
Previous Weekly High	98.81
Previous Weekly Low	94.63
Previous Monthly High	99.91
Previous Monthly Low	97.44
Daily Fibonacci 38.2%	98.24
Daily Fibonacci 61.8%	97.9
Daily Pivot Point S1	97.6
Daily Pivot Point S2	96.73
Daily Pivot Point S3	96.12
Daily Pivot Point R1	99.08
Daily Pivot Point R2	99.69
Daily Pivot Point R3	100.56

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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