USDOLLAR supported as chances for March rate cut decline
FXCM's USDOLLAR basket is trading in its daily bullish area between the upper blue and red bands. Its daily RSI is above 50 (green rectangle), which is the positive side of the indicator. As long as the RSI maintains above 50, there will be an underlying upwards momentum supporting the dollar.
The hourly chart on the right also has strength to it. The trend-following indicators are bullish, with the 5-period green EMA crossing above the orange 10-period EMA (top black ellipse). If the EMAs develop angle and separation to the upside this will be regarded as further positivity. Moreover, the momentum-based stochastic has also crossed up (bottom black ellipse). If it moves towards the 80+ area (blue arrow) and holds, the USDOLLAR basket will be pushing upwards in a potential swing.
The USDOLLAR is repricing as the chances of a March rate cut dissipate. Currently the CME FedWatch Tool has the probability for a March cut at 42.4%, which is a big decline from the 76.98% from a weak ago.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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