The US Dollar was trading marginally stronger on Wednesday and the dollar index was 0.15% higher during the London session, hovering around 94.70. Volatility could be elevated throughout the day due to major macro news.
Firstly, investors will focus on the manufacturing ISM for the month of July and the market expects a slight slowdown from 60.2 to 59.4, with the prices paid subindex seen declining to 75.5 from 76.8 previously.
Later in the evening, the FOMC meeting will conclude, but the Fed is not forecast to make any changes to monetary policy, only some slight change of wording in their following statement could happen tonight. The central bank should reiterate its hawkish stance toward two more rate hikes in 2018.
It appears the dollar index is forming some kind of a bullish triangle on the daily chart, with resistances located at previous highs at 95.00 and afterward at 95.50.
Support is seen at the bullish trend line near 94.25 and if not held, further decline to July’s lows at 93.75 could occur. The market has been choppy in the previous weeks and should the dollar break from these levels, we could see a bigger movement.
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