- The pair gains extra steam and moves closer to 96.00.
- US ADP report came in above estimates in January.
- FOMC meeting and Powell’s presser up next in the docket.
The greenback now appears on a firmer note and is lifting the US Dollar Index (DXY) to the area of daily highs in the boundaries of the 96.00 handle.
US Dollar Index bid ahead of FOMC
The index has managed to advance to levels just shy of 96.00 the figure, although it gave away some pips soon after Pending Home Sales unexpectedly contracted at a monthly 2.2% during December, more than initially projected.
Earlier in the day, the ADP report showed the US private sector added 213K jobs during the first month of the year, surpassing consensus.
The greenback is now up for the second session in a row ahead of the upcoming FOMC meeting. Despite consensus ruled out a move on rates, investors would closely follow the press conference by Chief Powell, where he is expected to unveil further details on the Fed’s plans for this year regarding monetary policy.
What to look for around USD
The FOMC meeting will be the salient event today. While rates are expected to remain unchanged, markets’ focus will be on potential changes (if any at all) to the Fed’s forward guidance for the current year. In addition, and following recent news, investors will look for any hints on the (renewed?) stance on the balance sheet. In addition, US-China trade talks are set to resume today, although speculations on a probable deal have somewhat deflated as of late.
US Dollar Index relevant levels
At the moment, the pair is up 0.14% at 95.94 facing the initial hurdle at 95.98 (21-day SMA) seconded by 96.22 (38.2% Fibo of the September-December up move) and finally 96.50 (55-day SMA). On the other hand, a breakdown of 95.62 (low Jan.29) would aim for 95.30 (61.8% Fibo of the September-December up move) and then 95.30 (200-day SMA).
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