Durable goods orders and the Conference Board’s consumer confidence gauge will take centre stage later today

The dollar reversed Monday’s losses to turn positive versus most counterparts today as risk sentiment turned sour again. Traders continue to digest China’s regulatory crackdown that triggered a massive sell-off in Asian markets at the start of the week. Now, investors are shifting focus to the upcoming Federal Reserve meeting that concludes on Wednesday.

Also, market players await fresh economic data out of the United States. Later today, durable goods orders and the Conference Board’s consumer confidence gauge will take centre stage along with the house price index and the Richmond Fed manufacturing index. If the data surprises on the upside, the greenback would derive extra support in the short term, especially as the Fed’s meeting is looming.

EURUSD failed to cling to the 1.1800 figure as the dollar shrugged off yesterday’s weakness to proceed to recovery. Now, the pair struggles around 1.1780 and could threaten last week’s lows around 1.1750 if the selling pressure intensifies. In the context of the upcoming Fed’s meeting, the path of least resistance for the common currency remains to the downside. Furthermore, the pair could threaten the 1.1700 figure if the greenback rallies in the coming days.

Following the rejection from monthly tops near 93.20 recorded last week, the USD index itself advanced to the 92.70 region as US 10-year yields remain side-lined below the 1.30% mark. The upbeat outlook for the index is expected to remain unchanged as long as the USD trades above the 200-day SMA, today at 91.35. On the other hand, the index could see a short-term downside correction, as the price is navigating around the overbought territory.


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