This week, the focus will be on speeches by Fed officials, with five out of eight scheduled appearances featuring hawkish members. This could push back against market expectations of rate cuts this year and strengthen the dollar’s performance. The dollar may also benefit from European political risks, such as Le Pen’s advantage over Macron in the French elections and weak June PMI data in Europe, which could increase investor anxiety.
In terms of economic releases, the following USD-related data will be released this week:
• CB Consumer Confidence (June) on Tuesday, June 25
• New Home Sales (May) on Wednesday, June 26
• Durable Goods Orders (May) on Thursday, June 27
• Final Q1 GDP on Thursday, June 27
• Unemployment Claims on Thursday, June 27
• PCE Price Index (May) on Friday, June 28
The PCE data is expected to be lower than last month. A significantly lower PCE would be needed to shift market speculation on rate cuts and signal a potential cut in September.
In terms of technical analysis, the Dollar Index (DXY) is currently at a critical point. A bearish correction ended last week, and a rally towards the Asian supply zone is expected. A decisive break of certain levels could lead to further bullish momentum towards weekly targets.
For EURUSD, a retracement towards the Asian POC at 1.0691 is expected after reaching a weekly supply zone. The bullish correction will depend on breaking key levels to confirm a bullish reversal or indicate renewed bearish strength.
Understanding technical analysis indicators like Point of Control (POC) can help traders identify key levels for potential buy or sell zones.
Overall, the market is closely watching Fed speeches and economic data releases to gauge the strength of the dollar and potential trading opportunities for major currency pairs like EURUSD. Traders should stay informed and adapt their strategies accordingly to navigate market volatility and make informed decisions.