The US Dollar, as measured by the DXY Index, has reached a seven-month low due to declining Treasury yields and expectations of further rate cuts by the Federal Reserve. Market focus is now on Chair Jerome Powell’s upcoming speech at the Jackson Hole symposium for insights into future monetary policy decisions.
Despite the bearish sentiment, the US economy continues to show resilience, with strong domestic demand and stable inflation rates. However, the market remains divided on the potential impact of future Fed rate cuts on the US Dollar.
Key Highlights:
- The DXY Index is currently at its lowest point in seven months against major global currencies.
- The US economy remains stable, but market speculations point towards a dovish stance by the Fed in September.
- Investors anticipate a total easing of up to 100 bps by the end of the year.
Technical Analysis:
Despite attempts by buyers to reverse the trend, the DXY Index remains bearish, with the RSI and MACD indicators signaling further downside potential. Support and resistance levels are as follows:
Support Levels: 101.50, 101.30, 101.20
Resistance Levels: 102.00, 102.50, 103.00
Overall, the US Dollar is facing pressure from declining Treasury yields and dovish expectations from the Fed. Powell’s speech at the Jackson Hole symposium will be crucial in determining the future direction of the US Dollar in the forex market.