Choppy market and Risk appetite!
Yesterday US dollar index fell sharply for different reasons. Firstly economic data.
One of the data that caused the dollar to weaken was the June new home sales data in the United States. According to the United States Department of Commerce report, the total number of New Home Sales in June dropped to 676,000 houses for the third consecutive month (a decrease of 100 thousand houses, compared with last year). It hit a new low since April 2020, far less than the market expected 800 thousand houses. The annualized monthly rate of new House sales announced simultaneously also unexpectedly fell further to -6.6%, which was previously expected to increase 3.5% after last month's decrease. The weak performance of the data reflects that increasing the house prices in recent months pushed the sales numbers lower than expected, and the market needs a new adjustment.
In addition, the US July Dallas Federal Reserve Business Activity Index also fall for the third month to 27.3, which was lower than market expectations of 32.1 and the previous level of 31.1. On the other hand, the Manufacturing output index, New order index, and Manufacturing Employment index all recorded growth, but the increase was limited, respectively, 31.0 (previously 29.4; +0.6), 26.8 (previously 26.7; + 0.1), and 23.7 (previously 22.9; +0.8).
Generally, published data was not good as expected, and after last week's data, confirming that economic recovery is not going as good as earlier expectations.
Today, while the FOMC's two-day meeting is starting, the Durable Goods Orders index must be watched closely.
And finally, with published data and mixed expectations from tomorrows' Powell speech, the choppy market is our expectations with sudden and severe ups and downs candles.
From the technical point of view, DXY has a strong resistance and support at 92.84 and 92.52. Currently in the H4 chart moves in a soft downtrend. RSI at 47 can not confirm any direction at this level. A new trend can start under or above these mentioned levels.
