The US dollar held firm against a basket of major currencies on Wednesday, as investors focused on two major risk events – a default by Chinese real estate developer Evergrande and the expected pace of US monetary policy tightening.

As of 02:10 GMT, futures on the December US Dollar Index are trading at 93.170, down 0.030 or -0.03%.

Evergrande, once China’s best-selling real estate developer, is approaching a key deadline on Thursday when the company is due $ 83.5 million in interest on its March 2022 bond.

Traders are also focusing on the US Federal Reserve, which should give more guidance on its future political direction, including when to start cutting bond purchases and when to start raising interest rates. The Fed will issue its monetary policy statement at 6:00 p.m. GMT.

December Daily U.S. Dollar Index

Technical analysis of the daily swing chart

The main trend is upward on the daily swing chart. A trade at 93.445 will signal a resumption of the uptrend. A move to 92.290 will change the main downtrend.

The primary range is 93.710 to 91.940. The index is currently trading on the strong side of its retracement area between 93.035 and 93.870, making it a potential support.

The minor range is 92.290 to 93.445. Its 50% level stands at 92.870. This helps to form a potential support group with the primary level of 50% at 92.825.

The short-term range is 91.940 to 93.445. Its retracement area at 92.695 to 92.515 is the last major support area before a major low at 91.940.

Technical forecasts of the daily swing chart

The initial direction of the US dollar index on December Wednesday will likely be determined by the reaction of traders at 93.245.

Bullish scenario

A sustained move above 93.245 will indicate the presence of buyers. If this move creates enough bullish momentum, look for a further test of the minor high at 93.445. Removing this level could trigger an upward acceleration with 93.710 the next major bullish target.

Bearish scenario

A sustained move below 93.245 will signal the presence of sellers. If this move generates enough bearish momentum, expect the sell to eventually expand to 93.035.

Failure to maintain 93.035 will indicate that selling pressure is building. This could trigger another breakout in the potential support group at 92.870 – 92.825.

For an overview of all of today’s economic events, check out our economic calendar.

This article originally appeared on FX Empire

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