Forex Today: US dollar prints a fresh cycle high, ends its best month in 4 1/2 years

What you need to know on Wednesday, July 1:

The US dollar index appreciated to the highest level yet since it took off from 90.441 level following the Federal Reserve's surprise hawkish hold on 16 June. 

Printing a high of 92.448, DXY traded at its best level since 8 April earlier this year.

A mix of strong US data, delta covid flows, hawkish Fed speakers and anticipation of a healthy Nonfarm Payrolls report on Friday helped the greenback maintain its strong narrative in financial markets on Wednesday. Fed's Robert Kaplan reaffirmed his hawkish stance and said, ''Id want to taper sooner than the end of the year.'' That, along with Private Payrolls increasingly solidly in June, put the US dollar on track for its best month in 4 1/2 years.  

The EUR/USD pair ex6tended its losses sub-1.1900 to test the June lows in the 1.1840 price zone. Below such a level, the bearish case will likely gain momentum. On the other hand, a bullish technical pattern has emerged which raises prospects of a significant correction to the upside for the forthcoming days, throwing the bullish US dollar narrative into question for the immediate future, at least from a technical perspective; More on that here:  The strong US dollar narrative strives on towards US NFP

GBP/USD settled around 1.3830 and remains undermined by Brexit jitters related to the Northern Ireland Protocol, aka, the sausage row. The current grace period waiving checks on British-made sausages and other chilled meats moving to Northern Ireland was due to end on Wednesday. Sterling is also facing uncertainty over the spread of the Delta variant of COVID-19 in the UK. Earlier this month forced the government to delay full reopening.

AUD/USD fell further to break the 0.7500 level to score a fresh low of 0.7491, while USD/CAD continued to test bearish commitments through 1.2400 again in the New York session to print a high of 1.2421, recovering from the London sell-off. 

Gold recovered from the fresh two-month lows in the $1,750s and tallied a gain of over 0.5% on the day, printing a high of 41,774.45 before ending by the closing bell near $1,770.

Crude oil prices rose from near the day's lows of $72.84 on a big draw on US inventories ahead of the highly anticipated OPEC+ meeting with spot near to $73.51 by the close of play on Wall Street.  

For the day ahead, traders will be watching the Aussie Trade Balance and Chinese Caixin Manufacturing PMI in the mid-Asian session ahead of a slew of EZ data late in the day. 

In the Europen session, central bankers will be speaking before a final round of US data in the US session, including Manufacturing PMI and Unemployment Claims, ahead of the highly anticipated US Nonfarm Payrolls on Friday.