US dollar index in bearish consolidation sub-97.00 ahead of dovish Fed hike

Dhwani Mehta FXStreet

The US dollar index, the greenback when measured against a basket of six major currencies, resumed its bearish momentum in Wednesday’s European trading, following a temporary reversal seen in the US last session.

The USD bears fought back control and dragged the rates back below the 97 handle before consolidating the latest leg down near the 96.85 region. Markets await the FOMC verdict and the Statement of Economic Projections (SEP), due later today at 1900 GMT, for the next push lower.

The greenback got thrashed so far this week on the back of the increased expectations of a dovish Fed rate hike. It’s widely expected that the Fed will lift borrowing costs by 25bps to a range of between 2.25-2.50%, which would make it the fourth rate hike of this year.

However, mounting global economic slowdown worries combined with trade war risks and lower inflationary pressures, the Fed is likely to signal fewer rate hikes next year and could hint an earlier end to its monetary tightening. This is the main reason why the USD sellers continue to lurk, despite the recent rout in the global equity markets.

US dollar index Technical Levels

Dollar Index Spot

Overview:
    Today Last Price: 96.81
    Today Daily change: -25 pips
    Today Daily change %: -0.258%
    Today Daily Open: 97.06
Trends:
    Previous Daily SMA20: 97.01
    Previous Daily SMA50: 96.58
    Previous Daily SMA100: 95.9
    Previous Daily SMA200: 94.32
Levels:
    Previous Daily High: 97.17
    Previous Daily Low: 96.7
    Previous Weekly High: 97.71
    Previous Weekly Low: 96.36
    Previous Monthly High: 97.7
    Previous Monthly Low: 95.68
    Previous Daily Fibonacci 38.2%: 96.88
    Previous Daily Fibonacci 61.8%: 96.99
    Previous Daily Pivot Point S1: 96.78
    Previous Daily Pivot Point S2: 96.51
    Previous Daily Pivot Point S3: 96.31
    Previous Daily Pivot Point R1: 97.25
    Previous Daily Pivot Point R2: 97.45
    Previous Daily Pivot Point R3: 97.72

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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