Since yesterday, we could see some dollar strengthening as always ahead of the Federal Open Market Committee (FOMC) statement or minutes. Now the Minutes are about to hold the attention of the market this week.
Dollar strengthened on Monday from the $1.1450 level, reached before as disappointing data kept dragging down the US currency. Now the dollar is gaining ahead of the Minutes report.
But what positive for the dollar may be expected from the release? The summary of the Q1 and april data does not seem to feed hawks in the FOMC and June’s rate-hike argument seems to be missing.
Only inflation seemed to calm down markets and the focus turns to labor markets and general outlook of the economy. Majority of the traders seem to bet on the September now, albeit being prepared to postpone bets even to December.
Federal Reserve (Fed) representatives mostly saw the possibility of first liftoff later this year, supporting above-mentioned speculation and adding strength to a liftoff-delay.
From the fundamental point of view, dollar is expected to strengthen from the long-term perspective, but short-term hit from the first quarter seems to be persisting even longer due to first rate-hike postponement.
From the technical point of view, we can see take profit chance at $1.1216 level in a short term. For a long-term dollar-bulls, the $1.0719 and later $1.0491.
For dollar-bears, we expect stops and take profits to be set at $1.15 level if the pair climbs again above $1.1448.
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