Dollar Index: A Roller coaster ride in the dollar is expected this week!

Dollar Index: A Roller coaster ride in the dollar is expected this week!

The dollar index rose slightly last week. Brodar’s momentum limited investors preparing for a flurry of policy decisions this week from major global central banks, including the US Federal Reserve.

The US dollar index rebounded from a December low as US Treasuries rose. This follows the release of hot inflation data this week. Resilience of strong economic indicators and the Fed’s cautious attitude towards rapid easing offer the possibility for the USD to recover.

So, considering the forecast of the Federal Open Market Committee, a big move is expected, which could give the USD more traction. Policy will be released Wednesday evening.

The Federal Reserve will keep interest rates at 5.25% to 5.5% at the end of its two-day meeting on Wednesday. But it is possible that the Fed could signal a more optimistic long-term policy outlook given the persistence of inflation at the consumer and producer levels.

Data last week showed that US consumer prices rose sharply in February and producer prices rose more than expected as commodity prices like gasoline and edible rose

In addition to Japan and the United States, the central banks of England, Australia, Norway, Switzerland, Mexico, Brazil and Indonesia will face the challenge, most of which are expected to keep interest rates on hold.

Technical Outlook

The dollar index was able to gain slighlty last week. The currecy found support from102.6360, and settled at 103.4320 up 0.70%.

Formation of bullish harami candle stick is indicating for a some strenthe might be seen in days to come. Howerver, currency would need to break above 103.6065 in order to test 103.99-104.2550-104.7550.

On the downside, immediate support is seen at 102.60 below it currency may retreat towards 102.2550-101.80.00.

Happy Trading!!

Commodity Samachar
Learn and Trade with Ease

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