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Talking Points:

- USDOLLAR Index selloff reaches 100% extension - more due?

- EURUSD triangle breakout valid above 1.1050.

- See the April forex seasonality report.

Here's where the US Dollar stands after several days of selling, ahead of two big data and events today: its erased all of its gains against the Euro since the FOMC meeting implosion; it's erased all of its gains versus the British Pound since early-March; and AUDUSD reached its highest level since the end of January. All of this USD-negativity is centered around one major theme: that market expectations about the timing of the Fed's rate hike got ahead of themselves due to the disappointing nature of the US economy; this is simply that trade unwinding.

Today could then be a one-two punch in the gut for the US Dollar before it stabilizes, especially if the FOMC meeting later in the day voices concern over the slowed rate of growth seen in the Q1'15 GDP figure. Curiously, USDJPY hasn't made a move lower throughout the recent US Dollar selloff, which offers a counterpoint: if the US Dollar is to rally, it's best suited to occur there. Japanese Yen short positions in the futures market have declined to their lowest level since the end of 2012, meaning any whiff of widening interest rate differentials could serve as a major tailwind for USDJPY.

See the above video for technical considerations in EURUSD, GBPUSD, AUDUSD, and USDJPY.

Read more: USD Weakness Sets in as GBP Extends, Readies for Gains

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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