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Bearish Continuation Possible if USDX Rejection Holds
Central Bank
Economic
Summary:
This zone has repeatedly triggered downside reactions in recent sessions and may again act as a ceiling if bulls fail to break through.
Sell
TradingUSDX
EXP
96.940
Entry Price
95.950
TP
97.900
SL
97.520 +0.300 +0.31%
0
Point
Flat
95.950
TP
CLOSING
96.940
Entry Price
97.900
SL
The latest minutes from the Federal Reserve’s most recent policy meeting reaffirm that the central bank remains firmly entrenched in a wait-and-see approach. Fed officials expressed continued caution about the U.S. economic outlook, highlighting persistent uncertainty despite some softening in labor market concerns and a modest easing of inflationary pressures.
However, the minutes were compiled before the renewed wave of tariff threats announced this week. Since then, divergence has grown within the Federal Open Market Committee (FOMC), with policymakers split over whether the first rate cut should happen as early as July or be deferred until some time in 2026.
Former President Donald Trump once again lashed out at Fed Chair Jerome Powell, calling for an aggressive 3% rate cut. His comments also shook the commodity markets, pushing copper prices higher after he proposed a 50% tariff on the red metal.
Adding to market unease, the Trump administration unveiled a new list of countries facing sharply increased tariffs if no trade agreements are signed before August 1. These levies—ranging from 20% to 50%—are part of a broader strategy that includes previously postponed reciprocal tariffs, originally delayed in April and again before the July 9 deadline.
Among the newly targeted countries are the Philippines (20%), Moldova (25%), Algeria (30%), Iraq (30%), Libya (30%), Brunei (25%), Sri Lanka (30%), and Brazil (50%). Trump warned that pharmaceutical products, semiconductors, and copper would also face duties near the 50% level, emphasizing that he "could have been even tougher on trade."
This heightened trade uncertainty and lack of policy clarity have left investors and global markets on edge, as the erratic nature of tariff implementation complicates efforts to forecast future trading conditions.
Technical Analysis
The U.S. Dollar Index (USDX) remains in a well-defined downtrend, but recent price action shows the formation of a short-term bullish retracement. However, this recovery now faces strong resistance near the 97.28 level—an area that coincides with the 100-period moving average on the daily chart. This zone has repeatedly triggered downside reactions in recent sessions and may again act as a ceiling if bulls fail to break through.
Further overhead, the 200-period moving average sits at 98.05, aligning closely with a descending trendline that could serve as an additional resistance barrier should the price push higher.
From a momentum perspective, the RSI is hovering near 65, approaching the overbought threshold. This suggests that bullish momentum may be losing steam, particularly as USDX struggles to reclaim the 97.32 level, which previously acted as support. A confirmed rejection at this zone could signal a bearish continuation, with downside targets around the recent local low of 95.95.
If, however, the index manages to breach these resistance levels decisively, it could challenge the broader bearish trend. But until then, sellers remain in control, and the risk of a deeper pullback remains elevated.
Trading Recommendations
Trading direction: Sell
Entry price: 96.97
Target price: 95.95
Stop loss: 97.90
Validity: Jul 18, 2025 15:00:00
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