U.S president Trump's tweets, expressing displeasure over dollar strength and Fed policy, are piling on pressure on the USD with technicals signaling potential deeper declines.
That Trump is showing concern over dollar strength is no surprise as it could negate his recent tariff measures but his criticism of rate hike may undermine the dollar-favorable U.S rate differential versus other countries. Since making a new one-year high at 95.53 in mid-June, the dollar index has struggled despite hitting a marginal new 95.65 high July 19 before moving sharply lower.
Index players are now focused on the 93.908 23.6% fibo. A break and close below the 55-DMA at 94.16 would only add to bearish sentiment. CFTC headway now could see these positions trimmed.
Friday's Q2 U.S GDP data is expected to be strong at 4.1% but anything less would hurt, as would any signs of potential fatigue in forward-looking data.
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