Overall, the Asian session was flat, but the major pairs started heading up during the early European session. Following the greenback's decline throughout the European trading hours, the dollar index is preparing to break below the 76.00 area, which has been the main support level over the last six days of trading. The dollar's sell-off comes on positive equity and commodity markets. Ahead, the market prepares foe the Fed meeting, at 14:15 EST, which is likely to have a strong influence in the forex market.

Dollar Index Technical View: 
4 Hour Chart: Mixed. Main price points: 74.95, and 76.82. Looking for: Wave ii
 
 The dollar index is trading lower at the moment, away from the 76.82 top that was established at the start of the European session. This current move down could be a red wave c) of a black wave ii flat pattern. In this case traders should be watching for a move down to the 76.70 support area before a bounce higher may appear again.

The alternative wave count, on a day of very important economics, is also one of the possible wave counts that is showing a  clear zig-zag correction labeled as circled  A, B and C. If this one is the correct count then the 76.82 highs must hold, while the market trades towards the yearly lows.

The euro (Eur/Usd 1.4760) was one of the slowest moving pairs of the day, advancing only 60 pips. This might happen as institutional trade desks are reluctant to move the euro ahead of the Fed and of the ECB meetings, which have an important weight into the currency market. To the upside, the next target is the 20-day moving average, in he 1.4850 area.

The pound (Gbp/Usd 1.6525) gained 120 pips during the Asian and European sessions, just one day ahead of the BoE interest rate decision. Right now, the pound is trading in the 1.6530 area, just below a trend-line that has been holding things up for two weeks. A break above this area will send the pair straight into the 1.6600 swing area.

The aussie (Aud/Usd 0.9075) just bounced from the 0.9090 area, the same place where the market formed a swing point high in Monday and Tuesday trade. On the medium term, the aussie's outlook lies to the upside, as the interest rate differential is working strongly in the favor of the Australian dollar. 

The cad (Usd/Cad 1.0600) declined 70 pips during the overnight session, extending the moves lower seen over the last few trading sessions. The cad started the day just below the 50-day moving average, which provided a strong resistance area throughout the first part of the day. Currently, the cad is trading near a very important swing area, the 1.600. If it finds the strength to break and hold below it, then its outlook will probably shift to the downside.

The swissy (Usd/Chf 1.0235) fell down to the 1.0235 area during the overnight session, which, has been a very important swing point lately, especially over the last two months of trading. A break below this price point will probably signal that the swissy is in a downtrend. In Tuesday trade, the swissy formed a reversal pin-bar formation after it bounced off the 50-day moving average.

The yen (Usd/Jpy 90.85) is currently trading just below the 50-day moving average, after earlier in the day breaking above the 20-day moving average. Ahead, it is very likely that the upcoming U.S.  calendar will create volatility.