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Forex: US Dollar Index closes sharply lower ahead of Fed Meeting
FXstreet.com (Barcelona) - The US Dollar Index closed the day down 0.54% at 81.72. It was a rough last day of April for the DXY, closing at its lowest level since Feb 27th, and finishing the month down 1.68%. Market participants will all be focused on the upcoming Federal Reserve Monetary Policy statement due out during the next US session at 18:00 GMT.
According to analysts at FXStreet.com, “There were some major developments in the USD index spot contract on Tuesday, with price penetrating by as much as 80 to 90% the area of daily demand at 81.50/82.00. The level has been well-defended by buyers since late February, yet seems to have its sessions numbered as buy orders get gradually absorbed. Risks are skewed to further broad-based USD weakness in the sessions ahead, with the index vulnerable to potentially further weakness until facing next obvious daily demand at 80.50/80.00, that is, more than 1 cent lower from current price.”
From a longer term technical perspective, the monthly candle for April can be viewed as an outside reversal candle (made a new intra-month high but closed below previous month’s low), and could have bearish implications going forward. However, it must be noted these candles due have a lot more meaning after a sustained trend is intact, and the US Dollar has been anything but trending the last 12 months.