Dollar Index: Fed “decision” likely to be upstaged by NFP wages?

May 1, 2018 10:56 AM

Exactly a week ago, we highlighted some of the fundamental and technical signs that the euro/U.S. dollar (EUR/USD) currency pair’s 16-month uptrend was finally coming to an end (see “EUR/USD: Nascent signs of a potential top, will the ECB blink?” for more).

While we were focused on developments on the East side of the Atlantic last week (including the ECB meeting), the market’s focus is shifting westwards this week, with the May Federal Reserve meeting set to conclude tomorrow and the always-impactful Non-Farm Payrolls report on Friday. Accordingly, we’re focusing on the outlook for the U.S. Dollar Index (DXY) today.…and what a run it’s had!

The index has surged by 300 pips in the last two weeks, bringing the most-followed measure of dollar strength back into positive territory for the year. As of writing, DXY is approaching its year-to-date high, and a key previous support/resistance level, at 92.60. After such a strong run in such a short period of time, we wouldn’t be surprised to see dollar bulls take some profits around that barrier.


About the Author

Senior Technical Analyst for FaradayResearch. Matt has actively traded various financial instruments including stocks, options, and forex since 2005. Each day, he creates research reports focusing on technical analysis of the forex, equity, and commodity markets. In his research, he utilizes candlestick patterns, classic technical indicators, and Fibonacci analysis to predict market moves. Weller is a Chartered Market Technician (CMT) and a member of the Market Technicians Association.