- US Dollar DXY Falls Towards 104.20 on Mixed S&P PMI Results
- The Federal Reserve’s consistent dovish policies also contributed to the decline.
- On Thursday and Friday, the most crucial events will be PCE data, hard-wearing goods orders and GDP revisions for Q2.
The DXY US dollar fell towards 104.20 on Wednesday, largely driven by mixed S&P PMI data and the fact that markets continued to expect a dovish outlook from the Federal Reserve (Fed).
With signs of disinflation continuing to emerge, market participants are becoming increasingly confident of a potential rate cut in September, but Fed officials remain cautious and data-dependent. As a result, attention is turning to key upcoming data, namely core personal consumption expenditures (PCE) and second-quarter gross domestic product (GDP) data on Thursday and Friday.
Daily Market Factors Review: DXY Down as Markets Review US Economic Data
- The US private sector continued its solid expansion, with the S&P Global Composite PMI rising to 55 from 54.8 in June.
- Offsetting this was the S&P Global Manufacturing PMI falling to 49.5 from 51.6 in June, while the services sector PMI rose slightly from 55.3 to 56.
- The CME FedWatch tool continues to point to the likelihood of a rate cut in September, although upcoming GDP and PCE data will largely determine DXY dynamics for the rest of the week.
Daily Market Factors Review: DXY Sends Bearish Signals
DXY shows a neutral to bearish outlook, with key indicators remaining largely in the negative zone, including the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD). Meanwhile, bearish signals from the completed crossover between the 20-day and 100-day Simple Moving Average (SMA) at 104.80 remain, and the index has fallen below the 200-day SMA, confirming the negative outlook. Support is found at 104.15 and 104.00, while resistances have been identified at 104.30 and 104.50.
