US dollar resumed its morning trend of appreciation following a temporary rout caused by the FOMC rate decision. The vote to hold the rate steady had largely been expected, as investors’ focus instead shifted to the statement accompanying the release. The Committee commented with further optimism on the recovery, while refraining from a change in stance on rate hike timelines consistent with recent decisions. Trading on the news, the lack of a hawkish stance by the Fed caused initial selling of the greenback against the majors. Equities also saw a push higher as the Dow Industrial Average reached a new 2009 high prior to a pullback of nearly one percent. Meanwhile, Oil, which had fallen sharply before the afternoon wore on, held steady at approximately $69 per barrel before falling further. This may bode well for a bottom pick in USDCAD, while the dollar index once more signals a potential support level for the US dollar.
[B]Intra-day Dollar Index Chart[/B]
Following a temporary retrace and volatility throughout June, the dollar index has been in a clear downtrend for the past several months. With resistance at 77.68 having been broken in the past few weeks, the index moved quickly to the current level of support at approximately 75.90. Indeed, support appears to have held following a temporary drop below it as a result of reaction to the FOMC rate decision. Traders looking for opportunities to pick a bottom in the dollar should watch carefully over the next few trading sessions.
[B]Dollar Index Daily Chart[/B]
