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USD tumbles after dovish FOMC minutes


Due to the much-hyped (and now less likely) September rate hike the USD finds itself on the back foot as bullish bets were unwound. Technically the Dollar also points lower with a retest of 95 now on the cards.

The USD appeared vulnerable leading up to the FOMC statement and seemingly didn't take much to see it roll over below the 50% retracement. The screenshot above is from yesterday's daily report, which is sent out to ThinkForex clients in time for European open. As it usually the case before an FOMC meeting or statement USD crosses were particularly messy but the USD Index did provide a clue for potential weakness. 

I think a September rate hike looks less likely looking at the minutes, with the main standout sentence being "Economic conditions warranting an increase in the target range for the federal funds rate had not yet been met." Oil is trading lower than it was since these minutes were written, China has since devalued its currency twice and their stock market continue to tumble. This could continue to weight on the USD this week and provide support for EUR, NZD and AUD crosses. 

It is highly probable we have seen a swing high at 97.08. This area houses the Monthly Pivot, 50 day MA, 50% retracement and now a Bearish Engulfing candle from New York close. A 61.8% extension lands around the 95.54 support and makes a suitable interim target but a break below 95 could target the 100% extension around the 94.60-82 support zone. 




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