Will the U.S. dollar establish a clear direction at the FOMC meeting, or will it remain on the sidelines?

Will the U.S. dollar establish a clear direction at the FOMC meeting, or will it remain on the sidelines?

14.12.2022

In the U.S. currency market yesterday, the U.S. dollar fell after the U.S. November Consumer Price Index, released yesterday, dropped significantly from 7.7% the previous month to 7.1%. The EUR/USD pair rose by approximately 140 pips from 1.0527 to 1.0673, reaching its highest level since June 9 of this year.From a technical perspective, the EUR/USD pair has broken above the 200-day SMA on the daily chart and is now rising with support from the 10-day MA. It will be worth watching to see if the pair enters an uptrend following a period of consolidation.

European currencies saw the EUR/GBP pair, which had been trading slightly lower following yesterday’s release of Germany’s December ZEW Economic Sentiment Survey—which came in at -23.3 versus market expectations of -27.0—enter a seesawing pattern. The EUR/GBP fell to 0.8560 before rising to 0.8605.It continued to rise during today’s Asian session, touching 0.8615. On the daily chart, the 200-day SMA is acting as support, so we will be watching closely to see if a rebound occurs.

Today’s economic indicators include the UK Consumer Price Index and UK Retail Sales at 4:00 PM, Swiss Producer Import Prices at 4:30 PM, South African Consumer Price Index at 5:00 PM, and at 7:00 PM, EurozoneIndustrial Production, at 21:00 the US MBA Mortgage Applications Index, at 22:30 Canadian Manufacturing Shipments and the US Import Price Index, at 24:30 US Weekly Crude Oil Inventories, at 28:00 the US FOMC policy rate decision and statement, and at 28:30 a press conference by US Federal Reserve Chair Powell.I intend to watch the situation carefully to see if the FOMC meeting will provide a clear direction for the US dollar.