Dxy Steady As Market Mulls Fed Next Move

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Dxy Steady As Market Mulls Fed Next Move

DXY Steady At 104 As Market Mulls Fed's Next Move

The current trading week was very volatile for the US Dollar pairs, as apparent from the price action in the DXY. In the next week, we don't expect much action as the holiday is fast approaching.

However, this will give time to the market players to understand where the Fed will go from here. The biggest question right now is whether the rumors about the Fed reaching the end of its rate hike cycle are true or not.

Given this week's price action in the DXY, some analysts believe that the greenback will regain some of its lost ground. On the last trading day, the economic calendar was very thin, with only building permits and the housing data index.

A Calm Week Awaits DXY

Pretty much all of these economic releases were of little importance & thus didn't cause any big moves in the FX market. However, experts believe that next week will bring some positive price action in the DXY, along with other asset classes. The reason for this is that the price action this week was a little overstretched, which suggests a correction from Monday.

If the rumors about the end of the rate hike cycle by the Fed gain momentum, it wouldn't be exactly bullish for the DXY. In fact, the DXY will likely move lower and may end up reaching the 103, 102, or the 101 level. On the upside, we have the 105 level followed by the 105.50 and the 106.

But despite all the talks about the end of the rate hike cycle, let's not forget that all of these are still rumors. If any of the Fed speakers give credence to these rumors, the DXY will assume a defensive position.

On the contrary, any bullish signs from the Fed members or the Fed chair will provide a boost to the US Dollar index. But given the next week's holiday in the US & other countries, the chances of any big moves are very slim.

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