All eyes are on whether the U.S. dollar can recover on the eve of the FOMC meeting

All eyes are on whether the U.S. dollar can recover on the eve of the FOMC meeting

21.03.2023

U.S. currencies weakened during U.S. trading hours yesterday, causing the U.S. dollar to decline. The USD/JPY pair fell by approximately 2 yen, from 132.627 to 130.539. The pair entered a downtrend along the 20-period moving average (MA) on the hourly chart. On the higher-timeframe 4-hour chart, the pair is extending its decline as it faces resistance at the 10-period MA.During today’s Asian session, the market has faced heavy selling pressure at lower levels and is attempting to rebound. Ahead of tomorrow’s FOMC meeting, we will be watching closely to see if the US dollar can recover and move higher.

European currencies rose against the U.S. dollar as the euro gained strength following remarks yesterday by ECB President Lagarde that "price stability and financial stability are compatible."The EUR/USD pair rose by approximately 100 pips from 1.0630 to 1.0730. Supported by the daily 200-day EMA on the downside, the pair is continuing its upward movement. Since the EUR/USD broke well above the 4-hour 200-day SMA following yesterday’s rally, it will be interesting to see if further gains follow after a correction.

Today, during European trading hours, we have the Swiss trade balance at 4:00 PM, Hong Kong’s overall balance at 5:30 PM,Poland’s retail sales at 18:00, Germany’s ZEW Economic Sentiment Survey and the Eurozone’s ZEW Economic Sentiment Survey at 19:00, and during U.S. trading hours, Canada’s Consumer Price Index at 21:30, remarks by ECB President Lagarde at 23:00, U.S. existing home sales at 23:00, and a U.S. 20-year Treasury auction at 26:00.We will be closely monitoring price movements to see if the US dollar can recover on the eve of the FOMC meeting.