USD to be pressured
After the Federal Reserve brought forward a 50bps rate cut from the March 18 meeting this week we saw the USD fall off quickly on the announcement. The expectations from the futures market were 100% for a 50bps rate cut and 70% for a 75bps rate cut. The delivered cut, early, pushed the dollar lower and the DXY is held under the 200EMA on the daily chart.
According to JP Morgan the last instances where the Federal Reserve have cut interest rates in an 'inter-meeting' they have cut rates in the next meeting as well. History would indicate that further dollar declines are ahead.
S&P500 historical fall from 2018 and impact on the dollar
Furthermore, reading Bloomberg this am, I came across another historically interesting piece. This time is was about the response of the Bloomberg Dollar Index to the last heavy S&P 500 falls. When we had the last US-China trade war induced stock sell off in 2018 it took a few weeks for the dollar to bottom out. In this case the USD remains a sell on rallies if history is to be repeated.
I expect to find USDCHF sellers at a pullback to daily resistance. If coronavirus fears continue to mount, then the CHF will find buyers.
