The USD Index, a measure of the strength of the USD against a basket of currencies, has managed to maintain itself above 101 after some aggressive selling in the last couple of days. As it stands, bulls will look to continue north from this level as they look to continue the interest rate hike fueled momentum. With the FED meeting taking place tomorrow, markets appear to have fully priced in the rate hike not only for March but for a large portion of the expected 3 rate hikes to take place this year. The FED has however, remained slightly cautious by stating that the interest rate hikes would be data depended and with most the key data already released all eyes will be on todays and tomorrows pre-FED data. Better than expected data will see the USD continue north with the US index looking to break above the 102 level while worse than expected news releases will give buyers the opportunity to exit some positions while bears enter some bargain hunting ones as we see the Index drop back to the 100 level.
The GBP is back on the sellers preferred list this morning as we have seen the GBPUSD break below last week’s lows as an extension to the recent aggressive selling. The GBPUSD is currently testing the 1.2125 support level after the House of Lords finally approved the Brexit bill, which is expected to be triggered by the end of this month. The GBP will continue to get hammered for as long as there is uncertainty about Brexit and its effects on the UK economy. There, may however, be a ray of light tomorrow as we see several key statistics being released ahead of the BOE meeting on Thursday. Better than expected data will see the GBP find some support while worse than expected data will result in the GBP continuing south as trader’s target sub 1.200 prices against the USD.