Dollar bulls gave up gains, amid weaker data, falling yield since yesterday and Today’s BOE minutes pushed the index lower by providing boost to pound.
Last month’s dovish FOMC broken the resilience of dollar and treasury bulls.
Technically speaking –
- Dollar is yet to launch a full scale retreat, however it might not be far away as price pattern suggests.
- Dollar index bulls’ advance were halted near 100 mark, with bearish evening star candle pattern around April 13th. Bulls tried to gain from 97 mark, however than was again halted with a doji pattern in daily chart yesterday resulting in a retreat.
- RSI suggests further weakness as it has now moved below 50 mark.
A large correction in dollar has been long due, a fall might bring it to the level suitable for long term position taking.
What might trigger a breakdown?
Two major event risks are scheduled for next week, which has high potential to derail the dollar big time.
- FED’s favorite personal consumption expenditure inflation is due on Wednesday along with GDP estimate.
- Most vital is FED’s interest rate decision. No press conference is scheduled, however dovish FOMC statement would be enough to derail dollar.
Dollar index is trading at 97.46, down -0.53% today.
The material has been provided by InstaForex Company – www.instaforex.com