Fed's Upbeat Statements May Push USD Higher

WikiFX News (28 Sept) - The Federal Reserve Vice Chair Randal K. Quarles said in a recent speech that he was optimistic about the country's economic outlook, which could push the dollar higher in the short term and keep the dollar dominating non-USD currencies.

Quarles predicted that the country's rapid GDP growth would boost employment with inflation near 2% through the following period ended 2021. He showed his confidence in economic prospects but didn't reveal further easing practices, which would encourage the dollar investments in the short term.

Against this backdrop, the DXY has rallied over 3% from the low on September 1 and is testing the resistance trend line from March. The RSI shows that the dollar does not seem to lack the upside momentum.

With the euro lately breaching under its support line from May amid the second wave of the pandemic in Europe, the RSI has staged a sharp downtrend, which may suggest its downside momentum is strong.

The Australian dollar has breached under the support from March but may rebound on bolsters in future tradings.

Gold has been struggling around the previous low of $1,860 after the consecutive breaches below the support line from March, leaving the $1,900 the hope for an uptrend recovery in future tradings.

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Chart: Trend of DXY