US Dollar afloat with markets looking for direction

• 
  The
  US
  Dollar
  turns
  flat
  this
  week
  and
  trades
  relatively
  steady
  at
  current
  levels. 
• 
  Traders
  will
  feast
  on
  no
  less
  than
  four
  Fed
  speakers
  on
  Wednesday. 
• 
  The
  US
  Dollar
  index
  hovers
  around
  105.00
  and
  is
  looking
  for
  direction.

The
US
Dollar
(USD)
trades
sideways
and
is
stuck
in
a
tight
range
in
most
currency
pairs
on
Wednesday.
As
such,
that
should
not
come
as
a
surprise
as
the
semi-annual
testimony
from
US
Federal
Reserve
(Fed)

Chairman
Jerome
Powell
before
Congress
on
Tuesday
did
not
bear
any
special
comments
or
new
angles
that
markets
have
not
priced
in
yet.
It
could
have
been
a
tape
recorder
replaying
the
latest
Fed
rate
decision,
with
the
bottom
line
remaining
the
same:
Powell
wants
to
keep
rates
steady
for
longer
as
he
is
afraid
to
start
cutting
too
soon. 

On
the
economic
front,
no
real
data
springs
out,
though
it
will
instead
be
the
side
events
that
will
draw
up
all
the
attention.
With
a
10-year
Note
auction,
it
is
an
ideal
moment
to
see
how
the
benchmark
tenor
will
be
behaving
and
how
the
appetite
for
American
debt
is
now
in
the
bond
market.
Add
in
there
no
less
than
three
Fed
members,
besides
Fed
Chairman
Powell,
who
is
heading
to
Congress
again
this
Wednesday,
and
it
looks
to
be
a
rather
Fed-driven
day. 

Daily
digest
market
movers:
Summer
breeze

• At
  11:00
  GMT,
  the
  weekly
  Mortgage
  Applications
  data
  for
  the
  week
  ending
  on
  July
  5
  has
  been
  released
  by
  the
  Mortgage
  Bankers
  Association
  (MBA).
  Last
  week,
  a
  slight
  decrease
  of
  2.6%
  was
  noted,
  with
  another
  decline
  by
  0.2%
  for
  this
  week.
• May’s
  Wholesale
  Inventories
  data
  will
  come
  out
  at
  16:00
  GMT.
  Expectations
  are
  for
  a
  steady
  0.6%.
• At
  17:00
  GMT,
  the
  US
  Treasury
  will
  allocate
  a
  10-year
  Note
  in
  the
  market.
• Several
  Fed
  speakers
  are
  lined
  up
  on
  Wednesday:
  • At
    14:00
    GMT,
    Federal
    Reserve
    Chair
    Jerome
    Powell
    testifies
    before
    Congress,
    providing
    a
    broad
    overview
    of
    the
    economy
    and
    monetary
    policy. 
  • Federal
    Reserve
    Governor
    Michelle
    Bowman
    and
    Federal
    Reserve
    Bank
    of
    Chicago
    President
    Austan
    Goolsbee
    will
    give
    the
    opening
    remarks
    at
    the
    Fed
    Listens
    in
    Chicago,
    United
    States,
    at
    18:30
    GMT.
  • Federal
    Reserve
    Governor
    Lisa
    Cook
    delivers
    a
    speech
    titled
    ‘Global
    Inflation
    and
    Monetary
    Policy
    Challenges’
    at
    the
    2024
    Australian
    Conference
    of
    Economists
    in
    Adelaide,
    Australia,
    at
    22:30
    GMT.
• Equity
  markets
  are
  a
  bit
  mixed,
  looking
  for
  direction
  with
  no
  real
  outliers
  in
  the
  European
  session. 
• The
  CME
  Fedwatch
  Tool
  is
  broadly
  backing
  a
  rate
  cut
  in
  September
  despite
  recent
  comments
  from
  Fed
  officials.
  The
  odds
  now
  stand
  at
  70.0%
  for
  a
  25-basis-point
  cut.
  A
  rate
  pause
  stands
  at
  a
  26.7%
  chance,
  while
  a
  50-basis-point
  rate
  cut
  has
  a
  slim
  3.3%
  possibility. 
• The
  US
  10-year
  benchmark
  rate
  trades
  at
  4.28%,
  near
  its
  weekly
  low. 

US
Dollar
Index
Technical
Analysis:
Same
story,
different
day

The
US
Dollar
Index
(DXY)
is
yet
again
looking
for
direction
with
no
substantial
moves,
even
after
Fed
Chairman
Powell’s
comments
on
Tuesday.
Fatigue
is
creeping
into
the
Dollar,
with
markets
looking
for
any
different
message
Powell
might
deliver.
The
continuous
message
that
interest
rates
should
remain
steady,
that
they
are
data-dependent,
and
that
cutting
borrowing
costs
too
early
might
be
counterproductive
is
starting
to
push
investors
out
of
the
Greenback. 

On
the
upside,
the
55-day
Simple
Moving
Average
(SMA)
at
105.16
remains
the
first
resistance.
Should
that
level
be
reclaimed
again,
105.53
and
105.89
are
the
following
nearby
pivotal
levels.
The
red
descending
trend
line
in
the
chart
below
at
around
106.23
and
April’s
peak
at
106.52
could
come
into
play
should
the
Greenback
rally
substantially. 

On
the
downside,
the
risk
of
a
nosedive
move
is
increasing,
with
only
the
double
support
at
104.80,
which
is
the
confluence
of
the
100-day
SMA
and
the
green
ascending
trend
line
from
December
2023,
still
in
place.
Should
that
double
layer
give
way,
the
200-day
SMA
at
104.41
is
the
gatekeeper
that
should
catch
the
DXY
and
avoid
further
declines.
Further
down,
the
correction
could
head
to
104.00
as
an
initial
stage. 

US
Dollar
Index:
Daily
Chart