4 out of the past 10 FOMC Minutes releases have resulted in a reversal of the DXY trend that was set in place from the previous FOMC meeting. Each one of these reversals showed a divergence between price action and the . That same indicator is showing up again prior to this release of the FOMC minutes. The DXY has fallen back into the consolidation area that it rallied from when Bernanke indicated the Fed was seriously looking at tapering bond purchases in September.
There are actually a couple separate opportunities for us to receive a stronger signal as to what will happen in September and onward. The FOMC minutes and the Jackson Hole summit. How concrete and specific the details are will dictate where we go from here. Price action implies market movers are easing out of positioning ahead of the event risk, but are preparing for what is viewed as a likely rally in the USD.