The US Dollar Index (DXY) is rising to the 110.00 area following Friday's retreat. This week’s FOMC meeting could send the DXY lower if the Fed is perceived less hawkish than expected, in the opinion of economists at OCBC Bank.

Caution to keep USD supported on dips in the lead-up to FOMC

“While a hawkish Fed is now the baseline scenario, we caution that a Fed that is perceived as less hawkish could see DXY ease lower post-decision. Meantime, in the lead-up to FOMC, expect caution to keep USD broadly supported on dips.”

“Support at 109.30 (21 DMA), 108.45 (38.2% Fibo retracement of Aug low to Sep high) and 107.70 levels (50-DMA, 50% Fibo).”

“Resistance at 110.30 before 110.78 (previous high).”