Market participants continue to sit on the sidelines as they wait for the policy-setting U.S. Federal Open Market Committee (FOMC) announcement, which convenes its two-day monetary policy meeting on Tuesday.
At its conclusion on Wednesday, market participants will be parsing its concluding statement and U.S. Fed Chairman Jerome Powell’s subsequent Q&A session for clues as to the central bank’s timeline for hiking key interest rates to combat inflation.
Global markets expect the U.S. central bank to likely signal to start lifting its interest rates as soon as March.
In a sign that geopolitical tensions are heating up, NATO announced it was putting forces on standby to prepare for a potential Russian invasion of Ukraine.
Meanwhile, the US Dollar Index, also known as US DXY, which measures the greenback’s strength against a basket of six major peers, climbed +0.24% to 95.80.
Based on the technical aspect, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator remains positive, although buckled.
However, there is evidence of mild bearish divergence, while the Moving Average Convergence Divergence (MACD) supports a positive signal.
At present, the market downside view holds to $1,800-06; however, a close above $1,842 (New York close) would negate this call and give a neutral bias in the short term.