US Dollar Index meets support near 97.70

DXY trades within a tight range in the 97.70 region.
Yields of the US 10-year note dropped to sub-1.6% levels.
The US 2y-10y yield curve inverted for the first time since 2007.

Pablo Piovano FXStreet

The Greenback, when tracked by the US Dollar Index (DXY), has faded the earlier spike to the area above 97.80 and has now receded to the 97.70 region.

US Dollar Index looks to yields, data

The index is now struggling for direction after a positive start of the week, although gains remain limited by the vicinity of the key 98.00 barrier.

In the FI universe, yields of the key US 10-year benchmark fell to the area below 1.60%, or fresh three-year lows, at the same time prompting the 2y-10y yield curve to invert for the first time since 2007.

Nothing noteworthy in the data space, where Import Prices rose 0.2% MoM in July and Export Prices also gained 0.2% inter-month, both prints coming in above expectations ahead of tomorrow’s more relevant publications: Retail Sales, the Philly Fed index and the Empire State index.

What to look for around USD

Alleviated jitters on the US-China trade war and the likeliness of the continuation of talks between both parties in the near term gave renewed support to the index in past hours. By the same token, yields of the US 10-year benchmark have managed to bounce off multi-year lows, although they remain under pressure. These trade concerns, while 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 losing 0.02% at 97.81 and a breakdown of 97.35 (100-day SMA) would aim for 97.21 (low Aug.6) and then 96.95 (200-day SMA). On the other hand, the next up barrier emerges at 97.87 (61.8% Fibo of the 2017-2018 drop) seconded by 98.37 (monthly high May 23) and then 98.93 (2019 high Aug.1).

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 off highs, back to 1.1850

EUR/USD loses some upside momentum, returning to the 1.1850 region amid humble losses. The pair’s slight decline comes against the backdrop of a marginal advance in the US Dollar as investors continue to assess the latest US CPI readings.

GBP/USD advances to daily tops around 1.3650

GBP/USD now manages to pick up extra pace, clinching daily highs around 1.3650 and leaving behind three consecutive daily pullbacks on Friday. Cable’s improved sentiment comes on the back of the inconclusive price action of the Greenback, while recent hawkish comments from the BoE’s Pill also collaborates with the uptick.

Gold surpasses $5,000/oz, daily highs

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The yellow metal’s upside is also propped up by the lack of clear direction around the US Dollar post-US CPI release.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.