- The index remains under pressure near the 100.00 zone.
- Risk appetite trends appear mixed at the beginning of the week.
- The NY Empire State Index will be the sole release on Monday.
The greenback, in terms of the USD Index (DXY), navigated a tight range close to the key 100.00 neighbourhood at the beginning of the week.
USD Index is cautious ahead of the FOMC and looks at risk trends
The index appears to have met some initial resistance around the 100.00 region so far on Monday, regaining little composure following Friday’s lows in the 99.60/55 band, an area last traded in late April 2022.
The persistent offered bias in the dollar has been particularly magnified in the wake of the release of US inflation figures for the month of June (July 12), in tandem with rising speculation that the Fed might end its current hiking cycle sooner rather than later.
In addition, mixed results from Chinese fundamentals published during early trade also collaborated with the vacillating price action in the FX universe on Monday.
On the speculative front, USD net longs dropped to levels last seen in late May, according to the latest CFTC Positioning Report for the week ended on July 11.
In the US data space, the NY Empire State Manufacturing Index will be the only publication later in the NA session on Monday.
What to look for around USD
The index remains under heavy pressure and attempts a tepid recovery with immediate target at the 100.00 region.
Meanwhile, the likelihood of another 25 bps hike at the Fed's upcoming meeting in July remains high and supported by the still tight US labour market and despite the persevering disinflationary pressures.
This view was further bolstered by comments from Fed Chief Powell at the June FOMC event, who referred to the July meeting as "live" and indicated that most of the Committee is prepared to resume the tightening campaign as early as next month.
Key events in the US this week: New York Empire State Manufacturing Index (Monday) – Retail Sales, Industrial Production, Business Inventories, NAHB Housing Market Index, TIC Flows (Tuesday) – MBA Mortgage Applications, Building Permits, Housing Starts (Wednesday) – Initial Jobless Claims, Philly Fed Manufacturing Index, CB Leading Index, Existing Home Sales (Thursday).
Eminent issues on the back boiler: Persistent debate over a soft/hard landing of the US economy. Terminal Interest rate near the peak vs. speculation of rate cuts in late 2023/early 2024. Geopolitical effervescence vs. Russia and China. US-China trade conflict.
USD Index relevant levels
Now, the index is down 0.10% at 99.85 and faces immediate support at 99.57 (2023 low July 13) followed by 97.68 (weekly low March 30) and 95.17 (monthly low February 10 2022). On the other hand, the breakout of 100.00 (round level) could open the door to 102.68 (55-dat SMA) and then 103.54 (weekly high June 30).
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 stays around 1.0300 ahead of FOMC Minutes](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/money-59004818_Medium.jpg)
EUR/USD stays around 1.0300 ahead of FOMC Minutes
EUR/USD stays under heavy selling pressure and trades around 1.0300 on Wednesday. News of US President-elect Donald Trump planning to declare an economic emergency to allow for a new tariff plan weighs on risk mood. US ADP misses expectations with 122K vs 140 anticipated.
![GBP/USD drops to fresh multi-month lows, hovers around 1.2350](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/iStock-688526532_Medium.jpg)
GBP/USD drops to fresh multi-month lows, hovers around 1.2350
GBP/USD remains on the back foot and trades at its weakest level since April, around 1.2350. The risk-averse market atmosphere on growing concerns over an aggressive tariff policy by President-elect Donald Trump drags the pair lower as focus shifts to US FOMC Minutes.
![Gold pressures fresh multi-week highs](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/safe-investment-gm147311616-17537479_Medium.jpg)
Gold pressures fresh multi-week highs
Gold price (XAU/USD) advances modestly in a risk-averse environment. The benchmark 10-year US Treasury bond yield holds at its highest level since late April near 4.7%, making it difficult for XAU/USD ahead of FOMC Minutes.
![Fed Minutes Preview: Key Insights on December rate cut and future policy plans](https://editorial.fxstreet.com/images/Macroeconomics/MonetaryPolicy/FED/united-states-federal-reserve-19785643_Medium.jpg)
Fed Minutes Preview: Key Insights on December rate cut and future policy plans
The Minutes of the Fed’s December 17-18 policy meeting will be published on Wednesday. Details surrounding the discussions on the decision to trim interest rates by 25 basis points will be scrutinized by investors.
![Bitcoin edges below $96,000, wiping over leveraged traders](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/Coins/Bitcoin/bitcoin_Medium.jpg)
Bitcoin edges below $96,000, wiping over leveraged traders
Bitcoin's price continues to edge lower, trading below the $96,000 level on Wednesday after declining more than 5% the previous day. The recent price decline has triggered a wave of liquidations across the crypto market, resulting in $694.11 million in total liquidations in the last 24 hours.
![Best Forex Brokers with Low Spreads](https://editorial.fxstreet.com/images/IT/BestBrokers_Medium.png)
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.