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The very dovish Federal Open Market Committee meeting inspired a knee-jerk USD swoon, but the weakness quickly yielded to a bounce in the greenback’s fortunes today – and if that bounce extends just a bit more it deserves the label of “reversal”, continuing the inability of USD traders to sustain a direction move of any notable duration. We’ll have a look at the quality of the closing levels today and tomorrow for a sense of whether USD bears will have their way or suffer a defeat even despite the dovish Fed.
Elsewhere, further NOK strength today on a hawkish Norges Bank sees further NOK extension higher.
Today’s FX Breakout monitor
: The US dollar breakdown in ready evidence here – at least versus the NZD, CHF, and EUR yesterday and today, with the USDJPY not far from a break level as well (see below). But the price action looks a bit hesitant after so many directional feints in the USD that have led nowhere this year. EURCHF breaks lower – an interesting move – possibly on Brexit stress worries. If so, headline risks next week could prove brutal in either direction.