USD Lagging Ahead Of FOMC Minutes
Shain Vernier • 1 min read
It has been a challenging pre-FOMC Minutes forex session for the Greenback. Falling values against the British pound and Euro have highlighted the action, with the early U.S. session furthering overnight losses. If nothing else, currency traders are hesitant to hold dollars going into a likely dovish FOMC Minutes release.
A few minutes ago, the NAHB Housing Market Index (Feb.) was released to the public. The number came in at 62, up from 58 in January. The NAHB report is a peripheral metric, akin to MBA Mortgage Applications. However, the index does directly reflect the opinions of home builders. Today’s positive figure suggests that builders are optimistic about the coming selling season and are planning on ramping up production to meet demand. Undoubtedly, this development is due to the new “flexible” FED policy and the availability of affordable capital.
The FOMC Minutes Is Dominating Trade Of The USD
At press time (11:00 AM EST), action across the equities and commodities markets is sluggish. However, there have been some good moves on the forex. Subsequently, two technical levels may come into play for the March British Pound FX futures contract.
Here are the two levels on my radar for the remainder of the trading day:
- Resistance(1): Daily SMA, 1.3082
- Support(1): Bollinger MP, 1.2952
Bottom Line: It appears that the bears are in full control of the Greenback in anticipation of a dovish FOMC Minutes. In the event this action continues, the Daily SMA for March British pound futures will come into play. Until elected, I will have sells queued up from beneath the Daily SMA at 1.3074. With an initial stop at 1.3101, this trade produces 25 ticks on a sub-1:1 risk vs reward management plan.