FXCM's USDOLLAR tracked US yields lower following yesterday's FOMC rate announcement and press conference. Fed chair Powell stated that the Fed "could afford to be patient" due to its interest rate increases to date. It also was clear that the Fed is data dependent choosing not "to provide a lot of forward guidance." The next meeting is some time away on 20 September. The Fed will have seen two CPI and jobs reports by then, giving them some idea of how the transmission mechanism is working.
- FXCM's USDOLLAR basket has charted a lower peak (LP) followed by a lower trough (LT).
- That puts the instrument into a downtrend in the significant weekly period.
- Its RSI is below 50 (blue rectangle), which is the bearish side of the oscillator.
- This denotes an underlying bearish momentum.
- The basket is trading below its black 30-week EMA, with the EMA pointing down.
- We are considering if the next lower peak in the series (LP?) is currently being charted.
- The USDOLLAR pulled back to its 50% retracement (green horizontal line) before finding resistance.
- Its EMAs look to be completing a dead-cross (black ellipse), which is a bearish cross to the downside.
- The RSI dipped below 50 (blue rectangle), denoting an emerging bearish momentum.
- The longer it maintains below 50, the greater the likelihood of a weaker USDOLLAR basket ahead.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.