Greenback will be a focus of the market participants and investors for this week. It is because the sellers are prepared themselves for the last big moment before the summer period.
That is actually the Federal Open Market Committee meeting that will be end in the middle of this week. This important meeting may maintain the market direction for several weeks ahead.
However, it is maybe not changing the volatility play just like expected by so many sellers out there. Forex is in its lowest level in a volatility which is experienced for more than a year so far.
The Current Situation of the Financial market
Generally, the financial sector and commodities are in the consolidation period. Furthermore, they are also in a level where the volatility is low. It can be seen from a progress or data of VIX.
VIX which is sold under its monthly decline noted the new lowest record in 15.15 on Friday. That triggers several predictions made by the analysts or even the market participants.
The market predicted that tge stable increase in the economic activity can be happened. Besides that, The Fed may experienced the low position for a longer time. That condition changes something.
It erases a little uncertainty from the market and the possibility to send the investors in a carry range. The yield result can be affected by the whole situation so happened in the market as well.
The Fed Decision will be Highlighted
Most parties predicted that the Fed will announce the careful decision. At last, that is going to weakening some supports from the greenback with many Fed liquidity available for the summer.
That organization is getting closer to discuss about tapering. However, it is impossible that The Fed will state it in their announcement. The possibility is that there isn’t any new projections.
That is why; the Jerome Powell press conference may become the only part of that event. The event like that can trigger the dust. It is especially for the traders to continue their activities.
The market think that The Fed reduction can be started in December this year. The first interest rate increase may occur at the early of 2023. However, the inflation data affects them.
The Main Inflation Reaches its Highest Level
The main inflation reached its highest level in 30 years showed in the Consumer Price Index last week. Powell well check it in line with the temporary condition came from the whole representatives.
How if there is not any focus in tapering from the Powell conference? If it is so, the carry research can send the greenback back to its south path because volatilities are down again.
In another United States data next week, the retail and industrial production sales will be in the second place after The Fed. That is the biggest possibility that may happened in the future.
The participants are now highlighting any data, news, and release in the market. It is especially from some important countries where their Release will be a crucial information, especially about Inflation.
The DXY Technical Analysis
Based on the chart of the week, the US dollar is focused on the demand area. Meanwhile, for ex is hoping for the volume increase and there is a probability of bullish to 91.50.
Elsewhere, the EUR / JPY stepped back to the level of 132.81 after the two days declining trend in this Monday period. It means that this currency pair continues some refuse from the 10-day SMA.
It comes to the direction for re-testing the past resistance line. Now, it is in the support situation in the middle of the bearish MACD signal. However, some events can create any doubts.
