As you already know, the USD has is trading in the red again and it could depreciate versus all its rivals in the upcoming period. USD drops as the USDX has started a significant downside movement after a failure to reach a crucial dynamic resistance and after a false breakout above a static obstacle.

A USDX’s further drop will force the USD to drop further versus its rivals. We’ll see what will really happen tomorrow as the FOMC will publish the Federal Funds Rate. The FED is expected to increase the interest rate again by 0.25%, from 2.25% to 2.50%. You should be careful tomorrow because most likely we’ll have a high volatility after the FOMC Press Conference.

You can see that the USDX has failed to reach the inside sliding line (sl1) and has failed to close above the 97.54 static resistance. You can see that the rate has developed a minor chart pattern, it has made a false breakout and now drops towards the downside line of this pattern. Technically, we may see a breakdown from the chart pattern and it could take out also the support from the upside 50% Fibonacci line of the major ascending pitchfork.

USDX drops right now, but we still need another confirmation that the rate will drop much deeper. A further drop will ruin the USD.

EUR/USD increased significantly after the USDX’s drop and has invalidated a further drop. If you’ll read my previous reports you will notice that I’ve talked about a further drop only if the rate would have made a valid breakdown below the 1.1301 static support and below the 150% Fibonacci line of the minor ascending pitchfork. I’ve told you in the last weeks that the rate could rebound if it will fail to reach and retest the outside sliding line (SL) of the major descending pitchfork.