The US Dollar Index managed to claw back despite making a fresh 52-week low. The false-break of the September 2008 low (75.89) triggered a reversal that could possibly mark a short-term double bottom base. A sustainable rebound above the 77 handle would confirm the accumulation pattern and refocus the 78 region, where a previous Fibonacci retracement lies (61.8% of 70.70-89.62). The EUR/USD & USD/CHF made an intraday double top & bottom (respectively) just after the FOMC announcement. This helped to complete the reversal in the so-called risk trade that was initiated by the turn-around in Treasury yields & Crude oil. Moreover, 4-hourly bearish MACD divergence has allowed the EUR/USD to stall near a 50% extension target at 1.4830. While, the overall outlook for risk appetite continues to be optimistic, Wednesday's price action suggests that the trend may be temporarily exhausted. This would be a positive development for the Greenback, which is already overwhelming net-short by large speculators (according to recent CFTC IMM data). As a result, the EUR/USD could quickly retest 1.4618 again (Fibonacci retracement). Meanwhile, reclaiming 1.4830/45 will immediately expose 1.4867 (September 2008 high).
