Bearish investors were offered an opportunity to exploit the shaky sentiment towards the Dollar during trading on Wednesday following the dovish FOMC statement which quelled expectations of a recovery in the US economy. The tone of the statement suggested that ongoing fears around diminishing global growth, mixed with explosive levels of volatility in the financial markets had dragged the Fed back down to reality with the four projected interest rate rises slashed to two. Although the unemployment rate in the US economy was an impressive 4.9% with inflation levels illustrating signs of revival, the central bank was left unmoved instead feeling that ongoing global woes had exposed the US to downside risks. The sentiment is turning increasingly bearish towards the USD and with inflation forecasts trimmed to 1.2% from 1.6%; the Dollar may be left vulnerable and open to more losses moving forward.

Dollar weakness provided a foundation for the EURUSD to surge to fresh weekly highs at 1.124. This pair is bullish on the daily timeframe as prices are trading above the daily 20 SMA while the MACD has crossed to the upside. Ongoing Dollar weakness should open a passage for bulls to send the EURUSD towards 1.140 and potentially higher.

BoE Meeting in focus

Investors may direct their attention towards the BoE policy announcement on Thursday in which most broadly expect the central bank to keeping interest rates at 0.5% with no dissent in the ranks. It must be remembered that the heightened concerns over the immeasurable impacts of a Brexit to the UK economy, combined with ongoing fears towards slowing global growth, have manufactured a horrible cocktail which should offer a compelling reason for the BoE to remain on standby. Although UK wage growth has noticeably picked up, the slowdown in the manufacturing sector and slash in growth forecasts for 2016 does suggest weakness in the UK which should provide another opportunity for sellers to attack the Sterling.

Speaking of the Sterling, the GBPUSD experienced a sharp incline during trading on Wednesday and this was on the back of Dollar weakness. This pair is in the process of turning bearish on the daily timeframe and a breakdown below 1.4150 may open a path to a steeper decline towards 1.400. From a technical standpoint, prices are trading above the daily 20 SMA while the MACD is in the process of crossing to the downside. Bears remain in control as long as the 1.440 resistance is defended.

WTI receives a boost

The volatile combination of dollar weakness and mounting expectations of a possible production cut has provided a platform for WTI bulls to send oil prices towards the psychological $40 resistance. This up move was complemented with recent reports which showed a decline in U.S stockpiles and as such encouraged bullish investors to pile onto the longs as speculations heightened that supply may be decreasing. Regardless of recent gains, the fundamentals of an unrelenting oversupply continue to punish oil prices in the longer term while the meeting on the 17th of April does not include Iran who remains on a quest to boost oil outputs to 4 million barrels a day. There may be a possibility that oil prices continue to rally ahead of the meeting as heightening expectations over a solution to the glut translate to speculative boosts in oil prices. In the bigger picture, WTI remains bearish and this over extended relief rally may eventually come to an abrupt end as the oversupply reality hits investors.

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