Fed Recovery Tone Irks Dollar Bulls

Overall, the currency market traded under the influence of the Fed's interest rate decision on Wednesday. The dollar index saw sell orders most of the day, as traders anticipated a continued bearish statement from the Fed, conceding that interest rates would remain low for a prolonged period. This is a sign that the spread between the interest rate of the U.S. dollar and the other major pairs could start to widen, thus fueling the carry trade scenario that has the dollar on the short side of the spread bet. Ahead, the market might follow a similar pattern, as investors prepare for the BoE and ECB interest rate meetings.

Dollar Index Technical View: TheLFB Member Charts

Daily chart trend: Short. Main price points: 75.00. Looking for: Ending diagonal

Prices on the dollar index daily chart were threatening the upper line of an ending diagonal, where a breakout will confirm that the bottom is in place. In this case, a retracement into the red wave IV area will be expected, while the current lows around the 75.00 zone must hold. The price action on Wednesday, as stocks moved all over the charts, will only add to the volatility in these moves....