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1 May 2013
Forex: US Dollar Index closes sharply lower ahead of Fed Meeting
FXstreet.com (Barcelona) - The US Dollar Index closed the day down 0.54% at 81.72. It was a rough last day of April for the DXY, closing at its lowest level since Feb 27th, and finishing the month down 1.68%. Market participants will all be focused on the upcoming Federal Reserve Monetary Policy statement due out during the next US session at 18:00 GMT.
According to analysts at FXStreet.com, “There were some major developments in the USD index spot contract on Tuesday, with price penetrating by as much as 80 to 90% the area of daily demand at 81.50/82.00. The level has been well-defended by buyers since late February, yet seems to have its sessions numbered as buy orders get gradually absorbed. Risks are skewed to further broad-based USD weakness in the sessions ahead, with the index vulnerable to potentially further weakness until facing next obvious daily demand at 80.50/80.00, that is, more than 1 cent lower from current price.”
From a longer term technical perspective, the monthly candle for April can be viewed as an outside reversal candle (made a new intra-month high but closed below previous month’s low), and could have bearish implications going forward. However, it must be noted these candles due have a lot more meaning after a sustained trend is intact, and the US Dollar has been anything but trending the last 12 months.
According to analysts at FXStreet.com, “There were some major developments in the USD index spot contract on Tuesday, with price penetrating by as much as 80 to 90% the area of daily demand at 81.50/82.00. The level has been well-defended by buyers since late February, yet seems to have its sessions numbered as buy orders get gradually absorbed. Risks are skewed to further broad-based USD weakness in the sessions ahead, with the index vulnerable to potentially further weakness until facing next obvious daily demand at 80.50/80.00, that is, more than 1 cent lower from current price.”
From a longer term technical perspective, the monthly candle for April can be viewed as an outside reversal candle (made a new intra-month high but closed below previous month’s low), and could have bearish implications going forward. However, it must be noted these candles due have a lot more meaning after a sustained trend is intact, and the US Dollar has been anything but trending the last 12 months.