DXY

EURUSD, DXY Analysis: the DXY and EURUSD are respecting potential consolidation boundaries, with the DXY back in the 104 zone, and the EURUSD back below 1.09.

Japan’s Ministry of Finance (MOF) appears to be taking full advantage of the path of least resistance by intervening when the US dollar and yields are under pressure. And their latest suspected intervention alongside dovish Fed comments saw USD/JPY break trend support and send DXY below its 200-day MA.

The post-CPI selloff of the USD has wound down, and price action suggests a bounce cold be due. The ASX has surpassed 8k for the first time on record, and bulls may be keen to seek dips.

EURUSD, DXY Analysis: latest CPI figures boosted the sustainability rate of the dis-inflationary track, leading to a drop in US bond yields and boosting the likelihood of a September rate cut

The sustainability of the US disinflationary trajectory towards the Fed’s 2% inflation target will be tested today with the release of the June CPI indicator

In the absence of an unexpected reacceleration in US inflationary pressures or unlikely hawkish pivot from Jerome Powell, it’s questionable whether the US dollar can reverse the bearish move seen last week. GBP/USD is one pair that may be able to capitalise on dollar softness, putting a potential retest of the March highs into play.

You get the feeling it’s only the US jobs market standing in the way between the Fed and the next easing cycle. That makes this Friday’s nonfarm payrolls report even more important, especially for markets that have been heavily impacted by rate differentials such as USD/JPY and USD/CNH.

If you want insight as to what direction USD/JPY may head next, there are worse indicators out there than USD/CNH right now. Because rather than the Japanese yen leading broader moves against the US dollar, evidence suggests it’s the Chinese yuan that’s the catalyst, at least in recent times.

The USD and yields were knocked swiftly lower on Monday as evidence of an economic slowdown in the US continued to build, helping AUD/USD to head for 76c despite the risk-off tone to the session.

I suspect we're seeing the early moves of a pullback of appetite for risk in general, which saw traders push Wall Street indices and gold lower on Wednesday thanks to weak treasury demand. And it seems to be paving the way for the next leg higher for the USD.

Barring a miraculous rebound before the end of month, the USD index is on track to snap its first 4-month winning streak since the December 2022 high.

The US dollar suffered its worst day of the year and Fed fund futures now imply with near certainty that the Fed will cut by September. And that saw AUD/USD breakout in style and USD/JPY roll over, breaking below two handles on Wednesday.

With US economic data delivering negative surprises at rates not seen over a year, with signs disinflationary forces are growing, it’s time for a rethink on the outlook for the US dollar. The era of selling rips rather than buying dips may be upon us.

The USD was weaker despite higher producer prices, as traders placed greater emphasis on last month's figures being revised lower. And that now sees a 51% chance of a September Fed cut, according to Fed Fund futures.

The US dollar has regained its footing heading into a Powell speech and US PPI report, whilst USD/JPY looks set to break resistance and head for 157.

With asset managers and large speculators trimming long and short exposure to yen futures, their appetite to speculate on the currency appears to be waning after BOJ interventions.

The US dollar snapped its 3-day winning streak and formed a bearish outside day, helping gold reach our upside target. EUR/USD and AUD/USD are now eyeing a move towards key resistance levels.