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Forex: US Dollar Index closes sharply lower ahead of Fed Meeting

FXstreet.com (Barcelona) - The US Dollar Index closed the day down 0.54% at 81.72. It was a rough last day of April for the DXY, closing at its lowest level since Feb 27th, and finishing the month down 1.68%. Market participants will all be focused on the upcoming Federal Reserve Monetary Policy statement due out during the next US session at 18:00 GMT.

According to analysts at FXStreet.com, “There were some major developments in the USD index spot contract on Tuesday, with price penetrating by as much as 80 to 90% the area of daily demand at 81.50/82.00. The level has been well-defended by buyers since late February, yet seems to have its sessions numbered as buy orders get gradually absorbed. Risks are skewed to further broad-based USD weakness in the sessions ahead, with the index vulnerable to potentially further weakness until facing next obvious daily demand at 80.50/80.00, that is, more than 1 cent lower from current price.”

From a longer term technical perspective, the monthly candle for April can be viewed as an outside reversal candle (made a new intra-month high but closed below previous month’s low), and could have bearish implications going forward. However, it must be noted these candles due have a lot more meaning after a sustained trend is intact, and the US Dollar has been anything but trending the last 12 months.

Commodities Brief: S&P 500 closes at all time highs, commodities mixed on the day

It was another green day for US Equities, with the S&P 500 closing the day up 0.25% at 1597.57 (a new all time high). The US Dollar was weaker across the board, with the DXY closing down 0.54% at 81.77. The weaker greenback didn’t seem to help the energy complex as oil finished the day down 1.68% at 93.04. Gold closed flat on the day at 1476 (although it did trade as low as 1460), while silver closed down 0.97% at 24.30. Market participants are eagerly awaiting the Federal Reserve Monetary Policy Statement in the next US session at 18:00GMT
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Forex Flash: China PMI, anything south 50.5 would toll on the AUD and NZD – BNZ

With very thin markets today in Asia-Pacific due to China closed for holiday and big part of the world getting ready for Labor day holiday, PMI China will be delivered at 01:00 GMT today, where “A tick down to 50.7 from 50.9 is expected,” says Bank of New Zealand. The analysts note: “The recent Chinese data tone has been disappointing so anything south of 50.5 would likely take a reasonable toll on the AUD and NZD,” they suggest.
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