Dollar Index - Shallow recovery runs out of steam ahead of US GDP release

Omkar Godbole FXStreet Contributor

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).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bullish	Neutral	Expanding
1H	Bearish	Neutral	Low
4H	Strongly Bearish	Neutral	High
1D	Bullish	Neutral	High
1W	Bearish	Oversold	Expanding
Updated Jul 28, 08:45 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

GBP/USD gains as easing Fed hike bets weigh on US Dollar

GBP/USD continues its winning streak for the ninth consecutive day, trading around 1.3390 during the Asian hours on Tuesday. The currency pair rises as the US Dollar faces headwinds as market participants scale back expectations for Federal Reserve rate hikes this month and in September.

EUR/USD eases toward 1.1400 as Hormuz risks support USD

EUR/USD is easing toward 1.1400 in European trading on Tuesday, facing rejection at the 1.1450 level. The pair loses ground amid a modest recovery in the safe-haven US Dollar, as renewed tensions in the Strait of Hormuz and Asian tech sell-off fuel risk aversion.

Gold sticks to losses as inflation fears lift US bond yields and USD amid Hormuz risks

Gold maintains its offered tone heading into the European session, albeit it holds above the $4,100 mark. Crude oil prices edge higher amid renewed tensions in the Strait of Hormuz, reviving inflationary concerns. This, in turn, triggers a fresh leg up in US Treasury bond yields, offering some support to the US Dollar, and weighing on the non-yielding yellow metal for the second straight day.

Bonk extends correction after $20 million hack from BonkDAO treasury

Bonk remains under pressure, trading below $0.0000044 after losing over 10% in the previous day. Monday’s correction occurred as Bonk Decentralized Autonomous Organization announced a governance exploit that resulted in the theft of $20 million worth of BONK tokens from its treasury.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance, arguing that the current world demands more flexibility.