The US Dollar (USD) bulls are probably not a fan of the US Federal Reserve for a while after the market move on Tuesday. US Federal Reserve Christopher Waller from the board of governors, surprised markets with a very dovish statement on Tuesday, which in its turn made US yields plunge and promptly devalued the Greenback. The US Dollar lost steam in Asia trading this Wednesday morning, though it looks to be trying to get a grip as it is off the lows for now. On the economic front, the calendar is picking up in weight as this Wednesday the US Gross Domestic Product is due to be released. The third quarter preliminary reading might give some counterweight against the recent downturn in the Greenback and could convince traders that the US economy as such is still growing at a solid pace against most of its competitors. Some readjustment might be granted as the US Dollar may have been a bit over-punished in the drop on Tuesday.

The US Dollar has added another leg to its losses, making it a three-day losing streak thus far. However, some small relief could be on the horizon as US GDP numbers later this Wednesday might help to at least recoup a bit of earlier losses. Add into that reasoning the Relative Strength Index (RSI) on the daily DXY chart which is breaking into “oversold”, and some relief looks granted in this descent. The DXY is sliding further below the 200-day Simple Moving Average (SMA), which is near 103.60. The DXY could still make it back up there, should US traders come back into the market and start buying the current dip. A two-tiered pattern of a daily close and next an opening higher would quickly see the DXY back above 104.28, with the 200-day and 100-day SMA turned over to support levels. To the downside, historic levels from August are coming into play, when the Greenback summer rally took place. The lows of June make sense to look for some support, near 101.92, just below 102. Should more events take place that initiate further declines in US rates, expect to see possibly even a near full unwind of the 2023 summer rally, heading to 100.82, followed by 100.00 and 99.41.