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Fed comments spark Dollar Index weakness
All was going well with our bullish dollar outlook – until the Federal Reserve came along. Comments from the Fed’s Fischer pushed expectations of a rate hike back somewhat and with it went the dollar, which broke below the inside trendline.
However, whilst the short-term looks somewhat ugly for the Dollar Basket, the medium-term outlook remains bullish unless price moves below 96.52. The overnight support at 97.31 (61.8% Fibonacci retracement) looks likely to be tested again, yet we also have a crucial ascending trendline in view just below that (currently 97.25).
Thus whilst in the short-term things do look a little more bearish, I am bullish overall and still expect we will see a bullish outlook come to the fore before long.