The USD regularly experiences heightened volatility during FOMC meetings and this week has been no different. June USD Index futures fell dramatically following the FED announcing a 24 month period of status-quo monetary policy. Currency traders ran for the door as only one rate hike was projected from now until the end of 2020. Now, the Greenback is attracting bids following a strong Philadelphia FED Index and jobs performance numbers.

June USD Index Futures: Technical Outlook

While the USD Index isn’t the best instrument to trade due to limited liquidity, it does give us a complete picture of sentiment toward the Greenback. At the moment, “optimism” is the word of the day. Rates are challenging the daily downtrend in what has been a furious buy-back.

Topside resistance for this market is in view. Here are a few levels to watch:

• Resistance(1): 38% Retracement, 95.930
• Resistance(2): Bollinger MP, 95.970
• Resistance(3): Daily SMA, 96.070

Overview: Aside from the robust Philly FED numbers, the U.S. employment situation came in strong. Continuing Jobless Claims (March 4) were listed at 1.750 million, beneath expectations of 1.1772 million. Initial Jobless Claims (March 11) also fared well, posting a figure of 221,000, about 4,000 beneath consensus estimates. All in all, today was a good day of economic news for the USD.

The price action currently evident in the June USD Index is the opposite of what we saw 18 hours ago. If this market closes the session above the 38% Retracement (95.930), the daily downtrend may be over. In the event that this occurs, it will be time to reevaluate the intermediate-term bearish bias. The dovish FED policy will likely be priced into the market and the June USD Index will be in a position to grind higher.