DXY Tests Highs Ahead of FOMC

The DXY made a run for highs yesterday as we had one more rally in yields just before the FOMC. We are currently flirting with highs, with a wick peaking past 110.75 to 110.86 or so. We will need to solidly break this if we are able to hit our next target at 111.37. We don't expect too much action until the Fed rate hike today at 2 PM EST. We are expected to see a 75 bps rate hike, with some small probability of a 100 bps increase. If we see a retracement after the release, we should see support at 110.20, with further support in the 109's, and a floor of 108.50. If we rally, then 111.37 is our next target.