After FOMC, what US Dollar Index is saying and one USD pair you have to know
Before FOMC, I suggested with correlations with VIX and DXY that Indexes still weak, any up is still a sell, however, the only thing which I don’t know, is whether there will be rate hike or not. However, as we move towards end of year, I think that the chance of a rate hike from FED is getting slimmer. Even already I thought that Fed is more likely to hike in Dec, I think that a rate hike in Dec is slim after Sep meeting.
DXY – a chance for USD to slide further
There is a 1234 seen in DXY. 93.80, previous low, is a first sign of USD weakening further. Of course, if 93 gives way, then DXY is going to break out of it’s base. This also suggests that USD is peaking with implications into US stock market
USDSGD – if the world is in chaos, where is safe then?
Fed repeatedly highlighted the need to look into external environment, and that world economies are not doing well. Then there is a need to park in somewhere possibly safe. I think that we could look at SGD as a possible safe haven (my guess).
I’ve marked in various resistance and a possible WR of trend line.
From boxes, we see a WRMB and a possible Big Move (pending close).
Note that WRMB usually highlight possible reversal point on a HTF resistance level.
There will be 3 possibilities on confirmation of a week close:
1. 1.40 serves as round number resistance
2. Price retraces to R1 (2 boxes low)
3. Price retraces to R2 (thus a possible HS forms)
Do look out for these levels and let me know when they are here.
Update on 21 Sep 3.30pm
On the 3 possibilities listed above, 1 and 2 has reached. I have already entered some positions.
Chart below, I’ve marked in an expanded possible zone on R2. Note that WR of trendline has also happened on weekly close.