Trusted by over 15 Million Traders
The Most Awarded Broker
for a Reason
CATEGORIES
News
- 【XM Market Analysis】--Gold Monthly Forecast: December 2024
- 【XM Group】--EUR/USD Forecast: Tests 1.05 Resistance
- 【XM Forex】--GBP/USD Forex Signal: Little Movement Likely as Both Currencies Stro
- 【XM Market Review】--AUD/USD Forecast: Drops as Bearish Trend Resumes
- 【XM Forex】--USD/ZAR Analysis: Values Return to Troubling Highs as Worries Grow
market analysis
On the eve of Powell's opening, will the US dollar usher in a short-term boost?
Wonderful introduction:
Since ancient times, there have been joys and sorrows, and since ancient times, there have been sorrowful moon and songs. But we never understood it, and we thought everything was just a distant memory. Because there is no real experience, there is no deep feeling in the heart.
Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Review]: Will the US dollar usher in a short-term boost on the eve of Powell's opening?" Hope it will be helpful to you! The original content is as follows:
On Monday (July 21), the US dollar index (DXY) was under pressure during the European period and traded around 98.3. The current market maintains a moderate risk appetite in the context of lack of major fundamental news, while the decline in U.S. Treasury yields are constraining the US dollar. The bulls and bears of the US dollar are in a tug-of-war, and the future market trend has attracted much attention from the market.
Brands
Recently, US economic data performed slightly better than expected, especially inflation-related indicators triggered the market's re-evaluation of the Consumer Price Index (CPI), which once pushed up the US dollar. However, recent remarks by Fed officials such as Christopher Waller and Mary Daly suggest that as many as two rate cuts may be cut this year, which has weakened the US dollar's upward action to some extent.
In addition, according to Reuters, U.S. Treasury Secretary Bessent has rumored to have told President Trump that Fed officials have expressed support for two rate cuts before the end of the year. Trump himself also exposed the news that several "large-scale" trade agreements will be reached soon, but the specific details have not been announced yet, keeping the market cautiously waiting and watching.
In Europe, a survey on corporate financing visits released by the European Central Bank (ECB) shows that eouu.cnpanies are generally optimistic about the economic outlook, but are worried about Trump's possible tariff policies. Boosted by this, the euro strengthened in the short term, putting pressure on the US dollar index.
In Asia, Japan's general election ended. Although Prime Minister Shigeru Ishiba did not retain his absolute majority in the Senate, he successfully maintained his position as a ruling coalition and promised to continue to focus on trade negotiations with the United States, avoiding the opposition's large-scale tax cut plan eouu.cning to power. The short-term strengthening of the yen also constitutes a U.S. dollar indexpressure.
It should be noted that the overall market risk preference is still limited, especially in the context of the approaching tariff deadline on August 1 and the continued tension in Europe and the United States, the analysis believes that the market demand for high-risk assets may shrink at any time, thereby indirectly supporting the safe-haven attributes of the US dollar.
Technical:
The current daily chart of the US dollar index shows that since the March high, the US dollar has continued to decline and is currently in the downward channel. The Bollinger Band indicator shows that the Bollinger middle rail is at 97.8723, the upper rail is 99.2694, and the lower rail is 96.4752. The price is hovering near the middle rail, reflecting the short-term consolidation trend. It is worth noting that the downward trend line eouu.cnposed of the recent low of 96.3729 and the previous low of 97.9229 is still valid, and the current price has put upward pressure on this trend line.
In terms of MACD indicators, the DIFF line is -0.0264, the DEA line is -0.2199, and the MACD column value is 0.3868, indicating that the momentum of the short-term rebound is increasing, but it is still below the zero axis, and the overall structure is empty.
RSI indicator shows that the current RSI is 51.9002, which is at a neutral level, but it has risen significantly from the previous low, and there is room for continued correction in the short term. However, from a larger cycle perspective, RSI has not yet entered the overbought zone, implying that the medium-term rebound may be limited, and we still need to be wary of the risk of drawdown.
Overall, the analysis believes that the US dollar index may continue to rebound in the short term to challenge the 98.50-99.00 area, but if it cannot stand firm at the 99 mark, you need to beware of the possibility of retreating to the 97.50-96.50 area.
Prevention of market sentiment:
Current market sentiment tends to be cautiously optimistic, but it is obviously full of uneasiness. On the one hand, the strong US data performance has caused some bulls to re-enter, but the Fed's expectation of a rate cut, the tariff game between Trump and the EU, and the phased strengthening of the yen and the euro have all kept the market ready.
It is particularly worth mentioning that Federal Reserve Chairman Jerome Powell will attend a public event this Tuesday (July 22 Beijing time). Although it is in the "silent period" before the interest rate meeting, the market is still paying close attention to whether he will accidentally release monetary policy signals.
In addition, the Fear and Greed Index shows that market sentiment has not yet reached an extreme level and there is no large-scale demand for safe-haven in the equity market, which means that the safe-haven buying of the US dollar is still in a wait-and-see state.
Future Outlook:
From bulls, analysts believe that if Powell accidentally tilted in his public statement, or the subsequent U.S. durable goods orders, PMI and other data released later exceeded expectations again, the US dollar index is expected to hit the 99.00-99.50 resistance level, and even test the psychological threshold of 100 integer; but it should be clear that any upward breakthrough must be accompanied by amplification of trading volume and market sentiment resonance. If the volume is insufficient, it may be a false breakthrough.
In terms of short prospects, analysts believe that if the market continues to trade, the rate cut is expected.In the future, if Trump's escalating pressure on the EU triggers market concerns about US economic growth, the US dollar index may return to the decline, with the support below focusing on 97.50 and 96.50, and may even fall below 96.3729. Once lost, the downward space will be opened up to enter a larger level of downward trend.
From the short-term outlook, analysis believes that this week is a "news vacuum period", and the US dollar may continue to fluctuate and consolidate within the 98-99 range, waiting for Powell's speech and subsequent data to be implemented; in the long run, the medium-term trend of the US dollar will depend on the eouu.cnparison of the Federal Reserve's policy path and the economic performance of major economies around the world, and the expectation of interest rate cuts is the core variable.
The above content is all about "[XM Foreign Exchange Market Review]: Will the US dollar usher in a short-term boost on the eve of Powell's opening?", which was carefully eouu.cnpiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
In fact, responsibility is not helpless, it is not boring, it is as gorgeous as a rainbow. It is this colorful responsibility that has created a better life for us today. I will try my best to organize the article.
Disclaimers: XM Group only provides execution services and access permissions for online trading platforms, and allows individuals to view and/or use the website or the content provided on the website, but has no intention of making any changes or extensions, nor will it change or extend its services and access permissions. All access and usage permissions will be subject to the following terms and conditions: (i) Terms and conditions; (ii) Risk warning; And (iii) a complete disclaimer. Please note that all information provided on the website is for general informational purposes only. In addition, the content of all XM online trading platforms does not constitute, and cannot be used for any unauthorized financial market trading invitations and/or invitations. Financial market transactions pose significant risks to your investment capital.
All materials published on online trading platforms are only intended for educational/informational purposes and do not include or should be considered for financial, investment tax, or trading related consulting and advice, or transaction price records, or any financial product or non invitation related trading offers or invitations.
All content provided by XM and third-party suppliers on this website, including opinions, news, research, analysis, prices, other information, and third-party website links, remains unchanged and is provided as general market commentary rather than investment advice. All materials published on online trading platforms are only for educational/informational purposes and do not include or should be considered as applicable to financial, investment tax, or trading related advice and recommendations, or transaction price records, or any financial product or non invitation related financial offers or invitations. Please ensure that you have read and fully understood the information on XM's non independent investment research tips and risk warnings. For more details, please click here