News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Bullish
Gold
Bearish
GBP/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
More View more
Real Time News
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.18% 🇯🇵JPY: 0.10% 🇪🇺EUR: 0.10% 🇨🇦CAD: 0.09% 🇬🇧GBP: 0.02% 🇨🇭CHF: 0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/GIHMI8cSUG
  • 🇪🇸 GDP Growth Rate QoQ Final (Q1) Actual: -0.4% Expected: -0.5% Previous: 0.0% https://www.dailyfx.com/economic-calendar#2021-06-24
  • 🇪🇸 GDP Growth Rate YoY Final (Q1) Actual: -4.2% Expected: -4.3% Previous: -8.9% https://www.dailyfx.com/economic-calendar#2021-06-24
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: France 40: 0.37% Wall Street: 0.29% Germany 30: 0.28% US 500: 0.21% FTSE 100: 0.04% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/mQrUIe36of
  • 🇫🇷 Business Confidence (JUN) Actual: 107 Expected: 109 Previous: 107 https://www.dailyfx.com/economic-calendar#2021-06-24
  • Heads Up:🇪🇸 GDP Growth Rate QoQ Final (Q1) due at 07:00 GMT (15min) Expected: -0.5% Previous: 0.0% https://www.dailyfx.com/economic-calendar#2021-06-24
  • Heads Up:🇪🇸 GDP Growth Rate YoY Final (Q1) due at 07:00 GMT (15min) Expected: -4.3% Previous: -8.9% https://www.dailyfx.com/economic-calendar#2021-06-24
  • Heads Up:🇫🇷 Business Confidence (JUN) due at 06:45 GMT (15min) Expected: 109 Previous: 107 https://www.dailyfx.com/economic-calendar#2021-06-24
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/FMNgFqNlSI
  • Wall Street Futures Update: Dow Jones (+0.21%) S&P 500 (+0.20%) Nasdaq 100 (+0.27%) [delayed] -BBG
DXY Index Approaches Consolidation Resistance Near Yearly Highs

DXY Index Approaches Consolidation Resistance Near Yearly Highs

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- The DXY Index is quickly approaching breakout territory after having traded in a sideways congestion over the past six weeks.

- Unless trade war concerns flare up again, there's nothing meaningful on the calendar until Friday's July US Consumer Price Index that is of material interest to the US Dollar.

- Retail traders are have faded both EUR/USD and GBP/USD losses, leading the IG Client Sentiment Index to a bullis outlook for the US Dollar.

See our longer-term forecasts for the US Dollar, Euro, British Pound and more with the DailyFX Trading Guides

The US Dollar (via the DXY Index) is approaching the topside of its recent near two-month consolidation, and Monday's price action was another step forward towards a bullish breakout materializing in the sessions ahead.

There is very little by way of US economic data before Friday that will prove to be a significant hurdle for the US Dollar; the only 'high' rated event comes on Friday in the form of the July US Consumer Price Index. With price pressures running high at +2.9% y/y in June and due to have remained at the same level in July, there is little doubt the Federal Reserve will tighten policy again when it meets in September.

After all, as the July US Nonfarm Payrolls report showed us last Friday, US Average Hourly Earnings are coming in at +2.7% y/y, meaning that real wage growth is negative. If this is the start of a new trend, which it very well could be, it will only incentivize the Fed to hike rates twice more this year.

Currently, Fed funds futures are pricing in a 90% chance of a 25-bps rate hike in September and a 65% chance of a hike in December. A week ago, odds were closer to 80% and 60% for September and December, respectively.

While there has been little movement around the US Dollar on the news front today - on either of the two big issues, the Fed or the trade war with China - there has been a bit of negativity abroad helping boost demand for the greenback.

Brexit concerns are rearing their ugly head once again, and now that the British Pound has been sapped of rate hike expectations following the Bank of England's one-and-done hike last Thursday, the floor is more or less falling out for Cable. Meanwhile, the Euro continues to face pressure after a weak June German Factory Orders report this morning, but as we examined in the weekly trading forecast, there is very little on the calendar for the Euro to look to for a lifeline to stop its recent skid.

DXY Index Price Chart: Daily Timeframe (July 2017 to July 2018) (Chart 1)

DXY Index Approaches Consolidation Resistance Near Yearly Highs

With the mix of conditions proving supportive for the US Dollar, the recent consolidation by the DXY Index may make an attempt at a topside breakout. We're still await a close above 95.53 (the June 21 bearish key reversal and the June 27 to 29 evening doji star candle cluster highs) to signal that the recent price congestion has finished. Commensurately, a move below 1.1510 would confirm the DXY Index breakout.

Read more: Euro Forecast: Euro Will Need to Look Beyond the Calendar to Stop its Skid

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

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

Follow him on Twitter at @CVecchioFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES