US Dollar Index flat around 98.20, focus on trade, Jackson Hole

DXY trades unchanged around 98.20 on Monday.
Yields of the US 10-year note rebound to 1.59%.
Markets’ attention stay with trade, Jackson Hole, data.

Pablo Piovano FXStreet

The Greenback, in terms of the US Dollar Index (DXY), is alternating gains with losses within a narrow range at the beginning of the week around the 98.20 region.

US Dollar Index now looks to Jackson Hole

The upside momentum in the index is losing some traction on Monday, although the Greenback manages well to keep business above the key barrier at 98.00 the figure.

Markets have ignored further trade rhetoric by President Trump so far, this time casting doubts over the ability of both parties to reach a deal in the near/medium term.

Other than trade jitters, geopolitical noise stemming from Hong Kong is likely to attract investors’ attention as the issue remains far from resolved.

Events-wise, the Jackson Hole Symposium on 22-24 August will gyrate around ‘Challenges for Monetary Policy’, while all eyes are expected to be on Chief Powell’s speech on Friday.

News from the speculative community notes USD net longs receded to three-week lows during the week ended on August 13, according to the latest CFTC report. The ‘flight-to-safety’ context appears to have weighed on the buck in favour of JPY and bonds.

In the US data space, the housing sector will remain in the limelight this week along with usual Initial Claims, advanced PMIs for the current month and the FOMC minutes.

What to look for around USD

The main focus this week will be on the Jackson Hole Symposium as well as on any hint on the Fed’s plan for the next months. In the meantime, trade concerns, while still unabated and in combination with the current inversion of the yield curve, carry the potential to spark further ‘insurance cuts’ by the Federal Reserve and thus undermine the constructive prospects of the buck in the next months. Opposed to this view emerges the Greenback’s safe have appeal, the status of ‘global reserve currency’, so far solid US fundamentals vs. overseas economies and the less dovish stance from the Federal Reserve (as per the latest FOMC event).

US Dollar Index relevant levels

At the moment, the pair is flat at 98.21 and faces the next resistance at 98.37 (monthly high May 23) followed by 98.93 (2019 high Aug.1) and the 99.89 (monthly high May 2017). On the other hand, a break below 97.83 (21-day SMA) would aim for 97.21 (low Aug.6) and then 96.97 (200-day SMA).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Ethereum Price Forecast: BitMine extends ETH buying streak, says long-term outlook remains positive

Ethereum (ETH) treasury firm BitMine Immersion continued its weekly purchase of the top altcoin last week after acquiring 45,759 ETH.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.