Dollar pressures key support, but Fed’s decision is likely to determine near-term direction

The dollar stays in red for the fifth consecutive day and cracks psychological 110 support on Tuesday, as sentiment weakens on speculations that the Fed may slow the pace of its interest rate hike.
Weakened daily studies add to downside risk but bears face headwinds at key 110 support zone, which repeatedly contained attacks in early October.
Sustained break here is needed to confirm bearish signal on completion of a double-top (113.83/82) and failure swing pattern on daily chart that would open way for a deeper pullback from new 20-year high.
Failure to clear 110 zone on first attempt, cannot be ruled out as support is significant and daily stochastic is deeply oversold that may keep near-term action in extended range.
However near-term bias is expected to remain firmly bearish while the price stays below 112 zone (10/20DMA’s bear-cross).
Only sustained break above 113.83/82 would bring bulls fully in play.
Traders are turning their focus towards Fed’s November 2 policy meeting, as decision of the central bank will be dollar’s key driver.
The greenback is likely to reverse its recent losses and probably rally beyond recent peak if the Fed remains on aggressive path and signals another 75 basis points hike in the last meeting this year, which will be required if the Fed wants to stick to its plan to raise interest rates to 5% by the end of Q3 2023.
Conversely, the greenback would fall further against its major peers if Fed signals less hawkish stance and opts for 50 basis points hike in December.

Res: 110.24; 110.81; 111.43; 112.00
Sup: 109.77; 109.51; 109.06; 108.40