Fresh economic data out of the US that could provide more clues about the Fed’s next steps

The US dollar keeps trending lower these days, as Treasury yields retreated from multi-year highs and risk demand strengthened. Last week, the greenback briefly jumped to fresh June highs around 104.45 and has been retreating since then as traders are fixing some pr ofit after a rally.

Today, the buck struggles to attract demand amid positive risk sentiment across the financial markets. Following gains on Wall Street overnight, Asian shares mostly rose on Tuesday as regional markets got a lift from signs China-U.S. relations may be improving. The two countries agreed to work together to smooth out economic relations.

Earlier in the session, the greenback briefly jumped above the 104.00 handle before retreating marginally. As such, the dollar holds just below 104.00, looking ready to extend its bearish consolidation in the near term. On the downside, the immediate support now arrives around 103.75, followed by 103.25 and the 103.00 zone. 

Should the DXY see a more intense bearish pressure, a break below the 103.30 zone would open the way towards the 103.00 support. Still, the overall technical picture stays positive for the time being.

Now, the market focus shifts to fresh economic data out of the US that could provide more clues about whether the Fed is likely to hold interest rates steady or raise them again in the coming months. Later in the day, market participants will get an update on consumer confidence, which is expected to remain strong in August after a sharp jump last month.

Technically, the US dollar looks relatively steady around the 104.00 figure. Should risk sentiment deteriorate in the near term, the greenback may regain this hurdle to retarget the 104.50 zone that capped the previous rally. Otherwise, the 103.75 zone could turn back into resistance.  


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