US Dollar: More Weakness in the Offing After Reversal at 106 Resistance
2024.07.01 05:49
The FX was mostly slow and sideways last week, and even stocks haven’t moved much. However, we did see some dollar selling towards at the end of the week despite the US PCE index coming out around expectations at 2.6% on a yearly basis. End-of-week volatility in the dollar and stocks in last horus of US cash market on Friday, may have been influenced by end-of-quarter and end-of-month flows. As I’ve mentioned before, summer can be very slow and choppy, and you may not see any significant breakouts due to a lack of major decisions by big central banks.
However, we must continue to keep track of “what we see rather than what we think” it will happen. That being said I see with a very interesting reversal from the 106 resistance level that we highlighted last week. There is potential for further weakness going into this week, as price can be coming out an ending diagonal pattern. However, it’s unclear how volatile can be this week, maybe some European and US data can impact the FX in next couple of days, but then on Thursday markets can be slow because of US Independence Day, trading conditions that can even expand into Friday. Additionally, US yields are coming a bit higher, so dollar bears may face challenges breaking through the 105 support level.
