The recovery in the Dollar Index (DXY) from the low of 93.15 ran out of steam at a high of 94.10 as US Senate the Republicans' latest alternate health care bill intended to repeal Obamacare
Repeated failure to repeal and replace Obamacare only forces market to question the Trump’s ability to deliver on the fiscal front.
Eyes US GDP
The preliminary US Q2 GDP would either add credence or deny the Fed’s claim that the Q1 slowdown was transitory. A strong GDP boosted by an uptick in consumption could yield a steeper treasury yield curve and strengthen the US dollar.
USD bears could make a strong comeback if the yield curve flattens (long duration yields fall faster than short duration yields) in response to dismal US GDP and core PCE data.
Dollar Index Technical Levels
A break above 93.89 (1-hour 100-MA) would expose 94.21 (1-hour 200-MA + 10-DMA) and 94.89 (weekly 5-MA). On the other hand, breach of support at 93.37 (July 26 low) could yield a sell-off to 92.62 (Aug 2015 low) and 91.92 (May 2016 low).
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