US Dollar Index (DXY)
The dollar edged higher on Tuesday, supported by cautious sentiment as the U.S. hinted at potential new tariffs on critical imports like semiconductors and metals. While U.S.–China trade talks resumed in London with “positive tone” rhetoric, no concrete deal emerged, keeping haven demand intact.
Technical Outlook:
The DXY climbed back toward 99.30, attempting to solidify support.
- If the dollar holds and breaks above 100.20, bulls may aim for 101.85.
- If price weakens and dips below 99.00, look for downside toward 97.70.
EUR/USD
The euro remains strong, hovering near 1.1425, as falling CDS spreads reflect improved credit conditions in Europe. However, the ECB is reportedly growing wary of the euro’s ~13% YTD rally, citing export competitiveness concerns and potential downward pressure on inflation.
Technical Outlook:
EUR/USD remains supported above the breakout zone.
- If price sustains above 1.1380, watch for tests of 1.1484, and then 1.1666.
- If it falters and breaks under 1.1300, 1.1143 becomes the next support to watch.
USD/JPY
Yen strength cooled slightly as Japanese inflation expectations softened, while U.S. Treasury yields steadied. The pair held firm near 147.35, helped by broader dollar strength but limited by safe-haven yen flows amid lingering geopolitical risks.
Technical Outlook:
The pair is retesting resistance.
- If it breaks cleanly above 147.50, upside opens toward 149.24.
- If price rolls over and dips below 142.08, 140.33 may follow.
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