Demand for the US Dollar increased on Tuesday which was boosted by positive growth in the US Treasury bonds. As a result, bulls pushed the rate past the 200-hour SMA and bounded it between this moving average and a trend-line near the 106.50 area.
Technical indicators favour the prevalence of the bearish sentiment today, as already indicated by a slight period of consolidation. From purely technical point of view, the Greenback should continue fluctuating between two trend-lines and thus target the 105.80 area within the following days. However, it is likely that traders are reluctant to breach the 200-, 55– and 100-hour SMAs prior to the FOMC statement at 1800GMT.
Given today’s fundamentals, a possible trading range is relatively wide, i.e., between 106.00 and 107.00.