- EUR/USD upsurge weighs on the US Dollar Index in the quiet NA session.
- American markets are closed due to the Independence Day holiday.
- ADP employment report and the FOMC minutes will be next significant catalysts.
Although it looked like the US Dollar Index, which tracks the greenback against six major currencies, was looking to extend its sideways action into the end of the NA session amid thin trading volume, a recent rally witnessed in the EUR/USD pair dragged the index to a session low near 94.20.
Citing sources familiar with the matter, Bloomberg reported that some members of the European Central Bank thought that the end of 2019 would be too late for a rate hike. Following this news, chances of a September 2019 ECB rate hike rose to 80% from 69%. The EUR/USD pair quickly jumped to 1.1670 from 1.1640 and weighed on the greenback. However, the bullish move lacked a follow-through and allowed the index to steady near 94.20.
On Thursday, the FOMC is going to release the minutes of the June 13 meeting, at which the Fed announced a 25 basis points rate hike.
"We expect the minutes to provide additional insight into the Committee’s deliberations on longer-term monetary policy questions as well as the potential downside economic risks arising from US trade protectionism," Nomura analysts wrote in a recently published report and elaborated further:
"Specifically, the Committee’s decision to remove forward guidance language from the post-meeting statement may have been accompanied by an interesting discussion during the meeting."
Ahead of the FOMC event, the ADP is going to publish its monthly private employment report, which is unlikely to receive a significant reaction from the market as a healthy labor market in the U.S. wouldn't be a surprise. Moreover, Friday's NFP report, specifically the wage inflation, will be a more relevant data regarding the Fed's monetary policy.
Technical levels to consider
The index could face the initial resistance at 94.45 (daily high) ahead of 95 (psychological level) and 95.25 (Jun. 28 high). On the downside, supports are located at 93.85 (Jun. 25 low), 93.20 (Jun. 6 low) and 92.70 (May 9 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 fluctuates in daily range above 1.0600
EUR/USD struggles to gather directional momentum and continues to fluctuate above 1.0600 on Tuesday. The modest improvement seen in risk mood limits the US Dollar's gains as investors await Fed Chairman Jerome Powell's speech.
GBP/USD stabilizes near 1.2450 ahead of Powell speech
GBP/USD holds steady at around 1.2450 after recovering from the multi-month low it touched near 1.2400 in the European morning. The USD struggles to gather strength after disappointing housing data. Market focus shifts to Fed Chairman Powell's appearance.
Gold retreats to $2,370 as US yields push higher
Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.
XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference
XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court.
US outperformance continues
The economic divergence between the US and the rest of the world has become increasingly pronounced. The latest US inflation prints highlight that underlying inflation pressures seemingly remain stickier than in most other parts of the world.