US Dollar Enters Consolidation Ahead Of Fed, Bulls Await

  • The US Dollar is consolidating ahead of Fed Day.
  • The bulls hide in the flanks with their eyes on a correction.

The U.S. dollar fell from a two-week high on Tuesday as investors put aside tensions between Russia and the West over Ukraine and instead focused on the Federal Reserve’s policy meeting on Wednesday. ‘today. The DXY, an index that measures the greenback against a basket of currencies, fell to test bullish commitments near 96 the figure where it is stabilizing in Asia.

Markets have been priced higher in March for some time, which left the greenback vulnerable to long pressure in today’s reveal of policy decisions in the final week of the month. Also, the focus was on today’s 5-year Treasury auction.

The bid-to-cover ratio was high, as was the yield, with the US selling 5-year notes at 1.533% vs. WI 1.547% on a sale of $55 billion. This was the highest yield since October 2019. The previous was 1.263% and the hedge bid at 2.50 vs. 2.41 previously. This indicates that the market may be pricing the Fed too hawkish over the medium term, which rattled the US Dollar ahead of today’s big event.

Meanwhile, on the geopolitical front, Russia said it was watching with great concern after the United States sent 8,500 troops on alert to deploy in Europe. This is a theme that should keep the greenback supported and the euro down.

DXY Technical Analysis

The M formation is a reversal pattern and the price should correct higher after falling from the daily highs.

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