DXY Bounces Off Lows

The US Dollar remains bid today with the DXY up off the YTD lows as uncertainty around US trade tariffs keeps the Dollar bid. Trump announced yesterday that new tariffs (full details still to be announced) will take effect as of August 1st. The pause on Trump’s ‘Liberation Day’ tariffs is due to expire tomorrow with reciprocal tariffs against a host of trading partners set to rise. However, Trump has note that he is open to negotiations and possible extensions depending on what proposals he receives.

Trade Hopes (And Fears)

Some trading partners, such as the EU, are widely expected to secure better terms with reports of lower tariffs to be announced. However, others such as Japan face the full force of US tariffs as a result of rocky negotiations and a lack of compromise. Looking ahead, traders will be keeping a close eye on incoming headlines with any signs of new trade agreements or further extensions likely to boost risk sentiment. On the other hand, is there is an absence of positive trade news and sweeping 25% tariffs look set to return on August 1st, this should start to take a greater toll on risk sentiment as we move through July.

Technical Views

DXY

The sell off in DXY has stalled for now into a test of the 96.89 level. However, price remains within the bear channel and below the 98-level resistance. While this area holds, focus is on a fresh push lower with 94.85 the deeper target for bears.