Today, on October 29th, the US Dollar is still going down against other currencies, including a currency basket of 6 other majors. Since the beginning of today’s trading session, the USD index has already dropped some 0,08%. The decline is taking place as traders and investors are looking forward to the results of the Fed’s FOMC meeting, which is to end today.
Over the course of yesterday’s trading session, the US Dollar lost 0,52% against the currency basket. This happened as the reaction to a decline in the demand for durable goods in the USA. In particular, the US consumer sentiment index released by Conference Board yesterday, increased up to 94,5 points this months, thereby showing the highest monthly increase since 2007. The figures came out better than expected (86,8 points) and exceeded the previous figures (89,0 points).
Meanwhile, US housing prices slowed down. The housing price index published by S & P / Case-Shiller (embraces housing prices in 20 major US cities) increased by 5,6% in August as opposed to 6,7% in July (y/y). The index slowed down later in 2014 after hitting the high of the year at 13,2% in January.
Durable goods orders decline. So did core capital goods shipments. This means that that future US GDP projections are likely to be decreased.
As mentioned above, the Fed is going to announce the results of the FOMC meeting today. Traders and investors are looking forward to seeing the latest decision regarding the Fed’s monetary policy.
European stocks are likely to keep on growing if bond prices are down. The US Dollar is consolidating amid the Fed’s statement while oil prices are going up slightly. Gold is trading without any major fluctuations.
USD Index Prospects
As usual, Masterforex-V Academy helps us define the near-term prospects of the US Dollar and other major currencies. This time, it is all about the world’s major currency - the US Dollar, the overall strength of which is represented by the USD index (seen in the chart below, courtesy of Masterforex-V Academy). Having analyzed the H1 chart of the USD index, the experts arrived at the conclusion that the retracement may go further down, if the price breaks below 85,23 and backed by fundamentals. If this is the case, the next target to watch is 85,03.
If the price reverses (backed by solid fundamentals, including the Fed’s decision regarding QE3) and breaks above 85,45, we are likely to witness a mid-term recovery set for 85,60 and 85,76.
