USD Index In Rotation Ahead Of FED
Shain Vernier • 1 min read
As has been the theme all week long, March USD Index futures are in heavy rotation. Another tight daily range has given traders few chances for entry as limited participation prevails. At press time (about 11:00 AM EST), the March USD Index is trading just north of the 95.500 big-round-number.
During the U.S. pre-market hours, a collection of peripheral economic metrics was released to the public. Here is a look at the hard data:
Event Actual Previous
MBA Mortgage Applications (Jan. 25) -3.0% -2.7%
ADP Employment Change (Jan.) 213K 263K
Pending Home Sales (YoY, Dec.) -9.8% -7.7%
It came as little surprise, but the U.S. real estate market continues to struggle mightily. Pending Home Sales (Dec.) fell by more than 2% year-over-year and MBA Mortgage Applications (Jan. 25) once again came in weaker than the previous release. Basically, FED policy and expectations of an economic slowdown have put the brakes on the U.S. housing market.
March USD Index Futures: Technical Outlook
USD traders are firmly on the sidelines in anticipation of the FED and FOMC Statements later today. Volatility and participation are light as exposure to the USD Index is being limited.
Here are the levels to watch for the March USD Index as the session wears on:
- Resistance(1): Bollinger MP, 95.740
- Support(1): Daily SMA, 95.530
Overview: For now, it is wait-and-see time for the USD. The coming FED Statements are expected to be dovish, focussing on “flexibility” and “patience.” Anything remotely hawkish is certain to shake up valuations. All in all, it isn’t a bad time to put the brakes on and wait for Jerome Powell to make his piece before diving into the USD.