The pair extended lower on Wednesday following Tuesday’s close in red after bulls got trapped above 30DMA.
Today’s probe below 20DMA (107.11) and Fibo 38.2% of 105.98/107.79 upleg (107.08) adds to bearish signals, as daily momentum is in the negative territory and MA’s in mostly bearish setup.
Close below 107.11/08 pivots would provide fresh signal for extension towards 106.80/66 (10DMA/Fibo 61.8%), as bull-trap weighs.
The dollar stands at the back foot on speculations that the Fed may introduce negative interest rates in attempts to cushion strong negative impact from the pandemic.
Speech of Fed Chairman Powell is the key event for the dollar today. The central bank is under pressure from President Trump to adopt negative rates after inflation made the biggest decline since the Great Depression.
The dollar would fall across the board if Powell gives more hints about negative rates, but could strongly rebound if he dismisses the idea.
Res: 107.11, 107.27, 107.48, 107.60
Sup: 106.87, 106.80, 106.66, 106.40
