DXY: Fed meeting starts today
The DXY dollar index resumed growth today. As of this writing, DXY futures are traded in close proximity to 107.00 mark.
Given the strong bullish momentum and the long-term uptrend of DXY, the breakdown of this local resistance level will be the first signal to increase long positions in DXY futures, and the breakdown of resistance levels 108.00, 109.00 - confirmation, “with the prospect of growth towards multi-year highs of 121.29 and 129.05, reached, respectively, in June 2001 and November 1985”.
Thus, there is every reason to believe that the USD will soon test the 109.00 level again, especially if tomorrow's Fed decision regarding its monetary policy does not disappoint market participants. Also of great importance will be the press conference following the Fed meeting, which will begin on Wednesday at 18:30 (GMT). In its course, a surge in volatility is possible not only in dollar quotes, but also in the entire financial market. If the rhetoric of tomorrow's statements by Fed Chairman Powell is considered tough by market participants, then, most likely, this will be followed by a strengthening dollar. Conversely, if the tone of Powell's statements turns out to be soft, then this will have a negative impact on the dollar. So far, we are leaning towards the first scenario.