- US Dollar Index stays in a tight range above 95.
- The political crisis in the U.S. stays in the crosshairs.
- Markets wait for the FOMC to release the August meeting minutes.
The EUR/USD pair rose above the 1.16 mark for the first time in two weeks after the USD weakened on the latest political developments in the U.S. However, the pair struggled to push higher as investors moved to the sidelines while waiting for the FOMC to publish the minutes of its August meeting.
Earlier today, reports of US President Donald Trump's former lawyer, Michael Cohen, pleading guilty to breaking federal election laws with an intent to influence the outcome of the 2016 presidential election triggered a broad-based USD sell-off. Moreover, Cohen's lawyer told the media that he had information regarding the Russian conspiracy. Responding to these developments, Donald Trump said "Michael Cohen plead guilty to two counts of campaign finance violations that are not a crime. President Obama had a big campaign finance violation, and it was easily settled!" via Twitter.
Today's data from the U.S. showed that existing home sales declined by 0.7% in July after contracting by 0.6% in June and missed the market expectation of a 0.6% growth by a wide margin. Despite the dismal data, the US Dollar Index recovered from three-week lows that it set below the 95 mark earlier today and was last seen at 95.17, down 0.04% on the day.
“Given that it was a meeting with almost nothing material to come from it, the minutes are unlikely to throw up much of interest, although our US economists noted that this could present the opportunity for the Fed to discuss longer-term issues, potentially including discussion around the balance sheet and the implementation of monetary policy (e.g. floor v corridor system), especially given the speech from NY Fed Markets Group chief Simon Potter immediately following the FOMC meeting earlier this month,” Deutsche Bank analysts wrote in a recently published report.
- When are the FOMC minutes and how could they affect DXY?
Technical levels to consider
A daily close above 1.1600 (psychological level) could open the door for further gains toward 1.1690 (100-DMA) and 1.1790 (Jul. 9 high). On the downside, supports could be seen at 1.1550 (daily low), 1.1500 (psychological level/20-DMA) and 1.1395 (Aug. 20 low).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.