US dollar tumbles as FOMC members expect no rate hikes this year

US dollar tumbles

The US dollar came under heavy selling pressure on the foreign exchange market this week, as the FED dot plots showed that FOMC members expect no more rate increases will take place this year. The US dollar index fell broadly after the FOMC meeting, with the greenback suffering its worst one-day drubbing since January, as financial markets scrambled to re-price the US dollar. Market participants had been expecting at least one more rate hike this year and in some cases even two rate hikes. The FOMC policy statement continued to highlight the improving employment situation in the American, although US policymakers remained concerned about the lack of inflationary pressures in the economy.

• The USDJPY pair is bearish while trading below the 110.80 level, key support is found at the 110.10 and 109.80 levels.

• If the USDJPY pair trades above the 111.80 level, buyers may test towards the 112.30 and 112.80 resistance levels.

Brexit uncertainty increases

The British pound came under pressure against the US dollar, Japanese yen and the euro currency this week, as the chances of the UK crashing of the European Union without a Brexit deal increased. British Prime Minter Theresa May sent a letter to European Union leaders asking for her a three-month extension of Article 50 after the House of Commons speakers denied her the chance of having UK Parliament hold a third vote on her Brexit plan. The United Kingdom still faces the prospect of leaving the EU without a deal in place, with EU officials eventually agreeing to just a two-week extension Article 50 extension.

• The GBPUSD pair is bearish while trading below the 1.3190 level, key support is found at the 1.2975 and 1.2660 levels.

• If the GBPUSD pair trades above the 1.3190 level, key resistance is found at the 1.3300 and 1.3475 levels.

Euro spikes

The euro currency spiked higher against the US dollar and the British pound this week, as the single currency benefited from a weaker US dollar and Brexit uncertainty. The EURUSD advanced towards the 1.1450 level following the FOMC interest rate decision, marking the second week of gains for the pair. The EURGBP pair also recovered from multi-month trading lows, as Brexit uncertainty caused traders to sell the British pound and move into the euro currency. The currency failed to take full advanced of weakness in the British pound and the US dollar, as the investors feared that a hard-Brexit scenario could harm the European economy.

• The EURUSD pair is bullish while trading above the 1.1360 level, key resistance is found at the 1.1450 and 1.1500 levels.

• If the EURUSD pair trades below the 1.1360 level, sellers may test towards the 1.1290 and 1.1260 support levels.

Bitcoin flatlined

Bitcoin traded above the $4,000 level, as the number one cryptocurrency by market capitalization traded in its smallest two-week trading range since October last year. The BTCUSD pair has been in an extended period of consolidation since the start of the month. The broader cryptocurrency continued to advance, as the major coins continued to hold key technical support. Litecoin briefly traded close to the $60.00 level, with the recent advance in the fourth-largest cryptocurrency by market capitalization starting to show signs of slowing.

• The BTCUSD pair is only bearish while trading below the $3,800 level, key support is found at the $3,650 and $3,550 levels.

• If the BTCUSD pair trades above the $4,000 level, buyers may test towards the $4,220 and $4,400 resistance levels.