USD index

A Quiet Early Week For The USD Index

Posted Tuesday, January 29, 2019 by
Shain Vernier • 1 min read

FED week is shaping up to be a quiet one for the USD Index. Tight daily ranges have been the rule, featuring moderate participation. Traded volumes for March USD Index futures are modest, with only about 9000 contracts changing hands thus far into the session. For the time being, it looks like many currency players are happy on the sidelines going into tomorrow’s FED Announcements.

The muted trading conditions facing the USD will more than likely give way to volatility in the coming hours. U.K. Parliament is due to vote on amendments to May’s Brexit Deal, known as “Brexit Plan B,” later on in the session. In addition, tomorrow’s pre-Wall Street open features the release of ADP Employment (Jan.), Pending Home Sales (Dec.) and MBA Mortgage Applications (Jan. 25).

Given the market fundamentals due out in the next 24 hours or so, there is likely significant action on the horizon for the Greenback.

March USD Index Futures

At the moment, there isn’t a whole lot going on for March USD Index futures. Rates are in heavy rotation around 95.500 and seem to be content there.

March USD Index Futures (DX), Daily Chart
March USD Index Futures (DX), Daily Chart

Here are a few levels to watch in this market as the next 36 hours unfold:

  • Resistance(1): Daily SMA, 95.525
  • Resistance(2): Bollinger MP, 95.755
  • Support(1): Psyche Level, 95.000

Overview: Accurately determining the short-term direction for the USD Index is currently problematic. For the time being, extended rotation between 95.500 and 95.000 is the most likely scenario. However, if we see a hawkish FED make waves at tomorrow’s announcements, then this market is heading much higher very quickly.

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