Insights 
VT 
Key Points:
- USDX hovers at 98.02, extending last week’s 0.4% loss.
- Technicals show consolidation after a months-long decline, with resistance near 99.50 and support at 97.50.
Dollar Index Struggles For Momentum
The U.S. dollar index (USDX) extended its decline to 98.02, down 0.05% intraday, following last week’s 0.4% loss. Since February, the index has shed over 10%, dropping from highs near 110 to June’s low of 95.97.
A brief recovery in late July stalled, with price action now consolidating between the 97.50 support zone and resistance at 99.50, where the 30-day moving average caps upside potential.
The daily MACD has flattened near the zero line, suggesting waning downside pressure but little evidence of a bullish reversal. Traders appear reluctant to take large directional positions before Tuesday’s U.S. July CPI report. A hotter-than-expected print could trigger a bounce toward the 100.00 psychological level, while a softer reading may prompt a retest of the June lows.
Market Braces For Data And Policy Headlines
This week’s events could define the near-term trajectory for the dollar. The U.S. CPI release will set expectations for the Federal Reserve’s policy path, while the August 12 U.S.-China tariff deadline raises the stakes for global trade.
Reports that Nvidia (NVDA) and AMD (AMD) agreed to allocate 15% of China sales revenue to the U.S. government may smooth negotiations, with markets leaning toward a 90-day tariff extension.
On the geopolitical front, a Russia-U.S. summit scheduled for Friday adds another layer of uncertainty. Meanwhile, crypto markets surged after President Trump’s executive order cleared cryptocurrency holdings in U.S. retirement accounts, with Bitcoin climbing 3% to $121,909 and Ether up 2.1% at $4,307.
Cautious Outlook
With the USDX trading near multi-month lows and volatility risk elevated, short-term moves will likely hinge on inflation data and trade headlines. A close above 99.50 would mark the first break above the 30-day MA since May, signalling a potential shift in momentum. Failure to hold above 97.50, however, could accelerate selling pressure toward 95.97.
