Jennet Yellen and Co has put December rate hike in play. This came as a surprise to investors and prompted the US Dollar INdex (USDX) to break the 97.00 resistance. In the statement, the Fed said that “In determining whether it will be appropriate to raise the target range at its next meeting, the committee will assess progress – both realized and expected – toward its objectives of maximum employment and 2 percent inflation,”. With the bad economics data churning out from the US coupled with ECB’s potential QE annoucement, this statement was considered hawkish and investors bought the USDX as the US Central Bank will strongly consider to raise rates in December.
Here are my expected trading levels which has has not change since I updated it way back on 26th August, 2015.
L1 – Lowest level if Economy stays the same and FED does not increase rates. (90.00 – 92.50)
L2 – FED Delays rate hike to December 2015 (92.50 – 98.00)
L3 – Rate hike in September (98.00 and above)
As price is currently trading at the top of L2 level, I would be on the alert for any breakout to above 98.00