The US will release the headlines of the latest FOMC meeting minutes on Wednesday, and although nothing significant was expected they now have added spice following the spat last week between the Treasury and the Fed. It is certain that the Fed does not want to signal a new round of QE amid the COVID-19 infection and the yet to be decided election results, however, this may now be up for grabs at the December meeting.
On top of that preliminary Markit PMI economic data for November is due for release today (Monday), before durable goods orders and core PCE price index for October on Wednesday, along with the second estimate of Q3 GDP.
The Dollar may be more responsive to how the US virus trend develops. A nationwide lockdown is a realistic possibility when Biden takes over the government in January.
As you can see in the weekly (W1) chart above, the USDIndex price has been locked between the January 2018 open (91.87) and the 2019 low (94.61). There hasn’t been much change in the last 3 months, with the price printing a low of 91.71 on the 74.6% Fib retracement and a high of 94.77. The divergence bias is evident in the 4 hour period, but has not yet provided a noticeable change; the rebound expected when bouncing off 92.22 was only able to correct the decline by 50%, before the price returned to the floor again. On the upside, as long as the 92.22 minor support holds, there is a possibility of a retest of the middle 93.17 price level in consolidation. On the downside, break of 91.71 would imply further weakness to test the lower level of 88.13.
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Ady Phangestu
Analyst – HF Indonesia
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