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

With tomorrow's FOMC meeting approaching, investors should watch closely to see if the U.S. dollar will continue to weaken.

28.01.2025

In yesterday's U.S. currency trading, 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 line on the hourly Bollinger Bands, and the candlestick closed lower. On the 4-hour chart, the price has broken significantly below the 200-period simple moving average (SMA), which had been acting as a support line, and on the daily chart, the price has fallen to the 75-period moving average (MA). We will need to watch closely to see if the U.S. dollar continues to weaken during U.S. trading hours.

Among European currencies, the Swiss franc showed strength, second only to 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, 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 FrenchConsumer Confidence Index, the Hungarian Central Bank’s policy rate and statement at 10:00 PM, U.S. Durable Goods Orders at 10:30 PM, the U.S. S&P/Case-Shiller Home Price Index at 11:00 PM, the U.S. Consumer Confidence Index and the Richmond Fed Manufacturing Index at midnight, and a U.S. 7-year Treasury auction at 3:00 AM.With the U.S. FOMC meeting tomorrow, we need to watch for any shifts in direction to see if the U.S. dollar will continue to weaken.