- The dollar index fell below H4-period EMA60, but found support at around H4-period EMA200. The index could stage corrective consolidations, with upper boundary at EMA60, lower boundary at EMA200.
- It will be worth watching whether or not the minutes of FOMC at meeting September which due to release at 2:00AM Thursday BJT could offer some supports to the greenback.
The dollar continued to retreat against a basket of six majors on Tuesday 10 Oct and fell below the trend support on the 4 hour chart while non-U.S. currencies and gold got broad-based buying. We will have minutes of FOMC at September meeting, due to release at 2:00AM Thursday BJT, when the central bank highlighted the improvement in U.S. economy and downplayed the impacts of recent hurricanes while FED confirmed that it plan to taper its balance sheet by the end of 2017 and the prospect of another rates hike in 2017 and raising rates three times in 2018. Whether or not the minutes could offer supports to the buck will be important to watch.
The dollar index (DXY) fell below its H4-period EMA60 and potentially found supports above EMA200. Its short term moving averages’ downward momentum increased and tried to cross below its long term moving averages which contracted significantly at this stage and we should be cautious of the potential of turning lower after contraction. The upside resistance level to watch is around 93.36 if the index could get boosts from FOMC meeting minutes.
（DXY H4 chart）
As far as non-U.S. currencies were concerned, the euro hit its H4-period EMA169 after breaking above its H4-period EMA60, could potentially enter into consolidation mode in the short term, with downside support at 1.1775, upside resistance at 1.1880. The British pound rallied further to test its H4-period down trend resistance. Above it, circa H4-period EMA60 follow by H4-period EMA200 could be the short-term resistances to watch. The Aussie dollar reacted off H4-period EMA50 resistance this morning. Whether or not its short term moving averages could turn lower and divergent again will be important to observe in the near future.
（AUD/USD H4 chart）
As to precious metals, the gold staged corrective declines after hitting 1294 which was a high from rally and confluence with the daily hurdle, indicating strong upside resistances. As in my previous report, the yellow metal could trade between H4-period EMA60 and H4-period EMA200 area going forward. Look for fresh dictations from FOMC minutes.
（Gold H4 chart）
By JasonZou —— Chief Analyst of AvaTrade China
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.