US dollar DXY index down around 94.00 ahead of FOMC

• The DXY index is moving with modest losses around the 94.00 region.
• The Fed is likely to announce the start of the QE reduction.
• The US ADP report will be the focus later in the session.

The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, loses some ground although manages to stay around the 94.00 level on Wednesday.

DXY Index focuses on the FOMC

DXY Index Extends Erratic Movement So Far This Week And Continues moving through the upper end of the weekly range around the 94.00 region, all amid tight moves before the FOMC decision to be released later in the day.

In the meantime, the continuation of the downtrend in US yields Across the curve it appears to be weighing on the dollar yield, with short-term bonds hovering around 0.45%, 10-year bonds around 1.52% and long-term bonds flirting with multi-week lows around 1.93%.

The cautious tone in the dollar occurs when market participants they expect the Federal Reserve to announce the start of the reduction of its stimulus program of 120,000 million dollars as early as November and at a probable monthly rate of $ 15 billion per month.

In addition to the FOMC meeting, the weekly MBA mortgage applications, the ADP report on private sector employment, factory orders and the ISM services PMI will be released today.

Relevant levels of the US dollar DXY index

At the time of writing, the DXY index is shedding 0.06% on the day, trading at 94.04. A break above 94.30 (October 29 high) would open the door to 94.56 (October 12 high) and then 94.74 (September 2020 high). On the other hand, the next support is at 93.27 (October 28 low), followed by 92.98 (September 23 low) and finally 92.96 (100-day SMA).