With tomorrow’s FOMC meeting approaching, will the U.S. dollar continue to weaken? Caution is advised.

With tomorrow’s U.S. FOMC meeting approaching, will the U.S. dollar continue to weaken? Caution is advised.

28.01.2025

In the U.S. currency market yesterday, the U.S. dollar weakened against the yen. The USD/JPY pair fell from 156.234 to 153.728. The price broke below the -3σ level of the hourly Bollinger Bands, and the candlestick closed lower.On the 4-hour chart, the price has broken significantly below the 200-SMA, which had been acting as a support line, and on the daily chart, the price has fallen to the 75-MA line. We will need to monitor whether the U.S. dollar continues to weaken during U.S. trading hours.

Among European currencies, the Swiss franc was the second-strongest after the Japanese yen. The USD/CHF pair fell from 0.9072 to 0.8970.On the hourly chart, the price has moved from above the 20-period moving average (MA) to below it. On the 4-hour chart, the price has broken below the 200-period simple moving average (SMA) support line, and on the daily chart, it has broken below the 20-period MA line, which had previously provided support. We will be watching price movements during European trading hours to see if the Swiss franc continues to strengthen.

Today’s economic indicators include the Australian NAB Business Confidence Index at 9:30, Japanese machine tool orders at 15:00, the French Consumer Confidence Index at 16:45, the Hungarian central bank’s policy rate announcement and statement at 22:00, U.S. durable goods orders at 22:30,at 23:00, the U.S. S&P/Case-Shiller Home Price Index; at 24:00, the U.S. Consumer Confidence Index and the U.S. Richmond Fed Manufacturing Index; and at 27:00, a U.S. 7-year Treasury auction.With tomorrow’s U.S. FOMC meeting approaching, we need to remain vigilant regarding the direction of the U.S. dollar and whether it will continue to weaken.