Fed's Warsh: Balance Sheet Changes to Be Announced in Advance

The DXY has entered oversold territory with the RSI14 below 30, which typically signals a short-term upward correction. News from the Fed that balance sheet changes will be pre-announced could support the dollar index by providing transparency and predictability to markets. However, the MACD remains below the signal line, and trading below the SMA20 and SMA50 suggests any upside may be limited. In the short term, a slight rise can be expected due to the oversold technical indicators turning around and the positive impact of the news, but a full trend reversal requires stronger signals.

USDJPY is trading at 161.97, down 0.24% in the last 24 hours. The RSI at 36.6 is approaching oversold territory, while the MACD remains below the signal line and in negative territory, indicating short-term weakness. The price is trading below the 20-day and 50-day moving averages (162.25 and 162.11, respectively), confirming a bearish trend. Fed's Warsh stated that balance sheet changes would be announced in advance, which the market may interpret as a dovish stance, potentially weakening the dollar. Therefore, further downside movement in USDJPY is expected in the short term.

USDTRY is trading at 47.036, posting a marginal 0.02% gain over the past 24 hours. The RSI stands at 57.7, indicating neutral territory, while the MACD is just below the signal line and moving sideways, offering no clear short-term directional signal. Fed's Warsh stated that balance sheet changes would be pre-announced, which did not surprise the market and thus exerted no significant pressure on the USD. Technically, the pair remains above the SMA20 and SMA50, suggesting a slight positive bias, but weak volume and momentum imply low sustainability for any upside move. Therefore, a sideways trend is expected in the near term.