USDOLLAR continues to consolidate in longer-term pattern

USDOLLAR Weekly Chart

- FXCM's USDOLLAR basket continues to consolidate in a sideways symmetrical triangle (green converging lines).
- Last week's candle (blue arrow) is a spinning top. This is a candle of uncertainty – bulls tried to take the USDOLLAR up, bears tried to take it down, but the basket closed relatively flat for the week.
- The basket is trading above its black 30-week EMA, but the EMA is yet to turn up.
- If it does turn up, it may suggest that the USDOLLAR is preparing to breakout to the upside of the symmetrical triangle.

USDOLLAR Daily Chart

- There is an element of shorter-term support for the USDOLLAR.
- The basket is attempting to keep its position in its daily bullish channel between the upper blue and red bands.
- The daily RSI remains on the bullish side of 50 (green rectangle). The longer it maintains this position, the more underlying support for the greenback.

Comment

• Liquidity will likely be light over the next two days, given tomorrow's US Independence Day celebration.
• It is not surprising that there is support on the daily chart.
• The hawkish comments by Fed Chair Powell last week at Sintra confirmed the recent dot-plot projections of two more hikes for 2023.
• ISM manufacturing index is the key focus today, while the services survey release on Thursday is also important due to a larger-than-expected drop in May.
• Jobs figures for June will be published on Friday, and based on Powell's recent comments, a significant weakness in the data would be necessary to consider a change to July's interest rate hike.
• The June FOMC minutes will be released on Wednesday.
• The dollar may gain support throughout the week as market participants find more justifications in the data and minutes to align with the more hawkish dot plot projections.