The bearish forex market sentiment towards the Dollar descended to new depths during trading on Tuesday following a slew of tepid data from the States which rekindled concerns over the health of the world’s largest economy.
Although durable goods orders were positive, it still missed expectations at 0.8% while consumer confidence followed a negative path consequently offering enough encouragement for the bears to drag the Dollar forex Index to the lows of 94.21.
With an awful mixture of both domestic and global events ensuring the Dollar remains depressed, Dollar weakness continues to be the central theme that reverberates through the currency markets.
The main focus and event risk for Wednesday will be the FOMC meeting in which forex markets broadly expect US rates to be left unchanged at 0.5%. While most may speculate that the FOMC could be a non-event due to the lack of a press conference.
I feel this may pressure investors to closely examine the statement for clues on future rate hikes or any change in language. Since the historic rate hike decision in December, the economic landscape has morphed for the worst with incessant declines in oil prices and ongoing concerns over slowing global growth sabotaging the Fed’s efforts to take action.
These factors have repeatedly caused the central bank to postpone rate hikes and with nothing changing fundamentally, a procrastinating Fed could be the ongoing theme for 2016.
Refocusing back on the Dollar Index, this forex Index is technically bearish on the daily timeframe as there have been consistently lower lows and lower highs price.