The dollar was down on Friday morning in Asia, caged into a narrow trading range as investors await a U.S. Federal Reserve meeting in the following week.
The Fed will hand down its policy decision on Apr. 28, when it is widely expected to keep its current policy largely unchanged.
Although investors will be on the lookout for any comments about scaling back monetary easing in the future, Fed Chairman Jerome Powell is likely to repeat European Central Bank (ECB) President Christine Lagarde’s warning that expectations of tapering of bond purchases as the ECB handed down its policy decision on Thursday. If that is Powell’s message when the Fed hands down its own policy decision in the following week, it will likely put downward pressure on Treasury yields and cap the greenback’s gains.
The euro, meanwhile, fell after Lagarde shut down expectations that ECB will start to consider tapering as the economic outlook improves in the continent. France targets re-opening schools on Monday and lifting domestic travel curbs, which started earlier in the month, on May 3.
Thursday’s break alerts for an initial turnover to short term peaking action. The near term trade is down and should continue selling pressures to attack 1.1970 support. A close under 1.1970 confirms a short term top, opening up potential selloffs to 1.1930. The market will need to climb back to a close over 1350* to rekindle bull trend forces.