The USD Index is trading lower on a day that has seen light trading as traders prepare for the FOMC decision on Wednesday. The USD Index is trading 0.05% lower after the greenback gave up earlier gains posted.
Traders are preparing for probably the most important Fed meeting in 2021 so far, as markets look to see if the FOMC changes its accommodative stance on monetary policy. May’s unexpectedly downbeat job numbers have dulled the bullish effect of rising inflation on the greenback, which fuels the armory with which to maintain its present QE arsenal.
The FOMC Chair Jerome Powell is expected to deliver his usual press conference 30 minutes after the FOMC decision. Whether or not the Fed will consider early tapering will also be on the cards. The markets are presently not very wired on this after jobs failed to return as expected in May.
Technical Levels to Watch
The 90.503 resistance remains the upside barrier for bulls. A break of this price level allows the USD Index to aim for the 90.965 resistance. Above this level, 91.26 and 91.50 remain additional targets to the north.
On the flip side, a rejection at the 90.503 price level allows for a corrective decline that sets up a run to the south, where 90.228 serves as the instant barrier to this move. 89.711 and 89.50 serving as additional downside targets if the 90.228 support gives way.