USD Index Slips to Multi-Month Low as Focus Shifts to FOMC Minutes and Fed Chair Powell’s Speech

The dollar index dropped to a new multi-month low on Tuesday, continuing its steep decline for the third consecutive day.

Short-term sentiment remains bearish amid renewed risk appetite, as markets have fully priced in a 25 basis point rate cut by the Federal Reserve in September, with increasing speculation about potentially more aggressive action.

The release of the July FOMC meeting minutes on Wednesday will shed light on Fed policymakers’ views, while Fed Chair Powell’s speech at the Jackson Hole symposium on Friday is expected to provide further guidance on the pace of the Fed’s anticipated easing cycle, likely to begin in September.

The technical outlook on the daily chart remains firmly bearish, supporting expectations for further downside towards key support levels at 100.29/18 (December 28 low / 200-week moving average) and the psychological 100 mark. A sustained close below the Fibonacci level at 101.73 (76.4% of the 100.29 to 106.36 move) would further deteriorate the near-term structure.

However, some profit-taking on oversold daily conditions could be expected in the sessions ahead.

Res: 10173; 101.94; 102.48; 102.86
Sup: 101.01; 100.29; 100.18; 100.00