Forex Trading Library

Intraday Analysis – Fed Pressures the Dollar

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Dow Jones 30 breaks triple top
Dow Jones 30 chart displaying bullish rally above 39300 resistance level post-FOMC economic projections

The Dow Jones 30 rallied after the FOMC economic projections. A break in the recent resistance of 39300 suggests bulls are firmly in control. However, there is always the concern of a reversal, which would require 39600 for the first test. A convincing break below 39450 would prompt buyers to cover their positions and help sellers regain control of the direction. A close above 39750 would resume the bias to the upside rally.

EURUSD finds support
EURUSD chart showing bullish breakout above 1.09 after Fed rate cut confirmation

The US dollar pulled back as the Fed confirmed multiple rate cuts this year. Sentiment fell sharply across the board as weakness in the greenback saw the pair jump above 1.09. The base of the bullish breakout at 1.0830 saw a double bottom confirmation. As prices retrace, a breach would dent the short-term optimism and trigger a deeper retracement towards 1.0790. The RSI’s overbought condition attracted some buying interest, but bulls must reclaim 1.0940 before a higher high can materialise.

AUDUSD gains momentum
AUDUSD chart indicating bullish exhaustion near 0.6600 amid Fed's signal, testing 20-day SMA support.

Like most US pairs, the Australian dollar rallied against the greenback due to the Fed’s recent signal. As price action exhausts, a drop below 0.6600 has put bulls on the defensive and proved 0.6630 on the 20-day SMA is challenging to crack. Sentiment remains cautious, and a bearish breakout would cause a retest of this month’s low at 0.6500, where the Aussie could be vulnerable to another sell-off.

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