The dollar loses further ground in European trading
The post-FOMC reverberations are continuing to play out for the dollar, with the Fed’s less hawkish take on tapering yesterday still ringing in the market.
USD/CAD has also fallen to a two-week low, tracking close to 1.2450 now as price dips further below support close to 1.2500 earlier in the day:
There is some minor support around 1.2420 to 1.2440 in the pair but key support is seen closer to 1.2400 with the 50.0 retracement level seen @ 1.2407.
For now, dollar weakness looks to extend a bit more as the market sticks with the reaction to the Fed. However, I still don’t see this translating to material weakness in the dollar if one is to view this in the context of the bigger picture of things.
A Jackson Hole pivot isn’t a given but the Fed remains on course to announce tapering by year-end, so that is something that should at least provide some comfort for the dollar.
But as always, don’t count out moves based on the charts so keep an eye on the technicals as they will also remain key in dictating trading sentiment in the weeks ahead.