No Joy for USD BullsThe US Dollar is trading lower today on the back of the May FOMC yesterday. The central bank held interest rates unchanged, as expected, but was far more close-guarded in its outlook than many were expecting. Many market players saw hawkish risks ahead of the meeting, given the recent strength in inflation and labour market data. However, the Fed refrained from giving any clear signal on next moves beyond saying that a rate-hike was highly unlikely to be the next step for monetary policy. Muted Fed MessageIf anything, the meeting took more of a dovish skew. Powell refrained from giving any fresh assessment of recent inflation and labour market data, simply saying that it was taking longer than expected to gain confidence that inflation is heading back to target. The takeaway from the meeting in terms of content and tone is that the Fed wants to cut rates, but inflation isn’t playing ball at the moment. NFP DueTraders now turn their attention to tomorrow’s jobs data. With the ADP figure yesterday seen coming in above forecasts, risks are skewed towards a further upside surprise which, if seen, should keep USD supported near-term. However, if we see any undershooting tomorrow this should feed into a weaker Dollar, driving a recovery rally across risk markets. Technical Views DXYThe rally in DXY has stalled for now ahead of the 107.04 level with price finding resistance at a test of the bull channel highs. Momentum studies are weakening, flagging risks of a correction lower. However, while 104.95 holds as support, focus is on a continuation higher. 
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