Today, on April 30th, the US Dollar is losing value against a basket of 6 other major currencies in advance of a major economic news block scheduled for today. The decline started at 79.97 and reached 79.75 at the end of today's European trading session.
Still, the overall market sentiment is bullish for the US Dollar since the market believes that the Fed will keep tapering the bond purchase program known as QE3.
Indeed, today is a crucial day for the near-term future of the US Dollar since the 2-day FOMC meeting started yesterday is about to be end today. The committee is currently deciding on the near-term future of QE3 and is going to make another interest rate decision. At the same time, the US Department of Labor is going to publish the ADP Non-Farm Employment report today, which is also a major indicator of the current state of affairs in the US economy. The US GDP quarterly report is also expected to day. And finally, the news block will be completed by the forthcoming speech that will be made by Janet Yellen, which currently resides over the Federal Reserve.
As you can see, this news block is going to influence a lot the entire foreign exchange market. The general tone of the news will determine the direction in which the US Dollar will go against other currencies, including the British Pound and the common European currency. Analysts expect Janet Yellen to answer a lot of questions concerning the interest rates and QE3.
Most of them expect the Fed to go on tapering the bond purchase program by $10bn/m down to $45bn/m as well as to keep the benchmark interest rate ultra low at 0,25%.
All in all, market may go volatile, which may end up with some tendency changes in currency markets.
Technicals
The trading experts working for Masterforex-V Academy have conducted comprehensive technical analysis of the USD index to define the likely scenarios after the US news block.
Technically, the H1 chart of the USD index indicates the completion of the bearish move represented by the 80.01-79.57 wave.
The 79.57 level was the starting point for the small-scale rally that stopped at 79.97. Then, during the European trading session, the index started losing value in advance of those major economic news. Prior to that, the price managed to break above the 79.87 resistance but failed to consolidate above it and retraced back, which means a lack of confidence and some uncertainty shown by the market. Indeed, traders and investors are not willing to risk a lot before they see a clearer picture in the US economy as well as the Fed's near-term policies.
