Forex markets have been taking what resembles a summer break, with two consecutive days of muted movements – Most major pairs are contained within a 300 pip range, but with the USD attempting a rally, let’s see if this may add fuel to create some volatility.
The Weekly Jobless Claims report just came with a beat – 227K vs 235K expected and shows another sign of strength for US Employment. Claims had started to elevate in the middle of June but seems like it only was temporary as we just received another positive report.
The latest tariffs news were the announcement of 50% tariffs on Copper imports (questionable idea by the way, trying to relaunch US Industrial production and giving them higher import costs isn’t the most viable thing, but markets are getting used to bad ideas from the Trump Administration), and also 50% tariffs on anything that comes from Brazil.
Let’s take a look at the US Dollar as markets start to prepare for next week’s US CPI Report.
Read More: German CPI confirmed at 2.0%, euro drifting, FOMC split over cuts
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Dollar Index 4H and 1H Analysis
DXY 4H Chart
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Dollar Index 4H Chart, July 10, 2025 – Source: TradingView
The US Dollar is currently breaking out from its 2025 Main descending channel after forming a bullish divergence with the last lows.
There had been a theme of imbalanced short positioning against the Greenback, which had started to be less interesting after the continuous drop down in the index throughout the first half – Particularly as US Data keeps surprising higher, postponing FED Cuts (and creating debate as to when they will actually be able to cut).
The breakout can be quite important for markets as flows markets may see some new trends in the second half that is just beginning.
There had been an upside breakout in June therefore markets may need a convincing breakout to estimate that the downtrend is completely unvalidated.
DXY 1H Chart
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Dollar Index 1H Chart, July 10, 2025 – Source: TradingView
Looking closer at the Dollar Index breakout, Greenback buyers are using a bullish trendline from the lows to retest weekly highs (97.84).
Short-term momentum is strong, just having breached the 1H MA 50, however, any movement will have to break out either on the upside or the downside as the past few days of up and down movement may lead to a simple consolidation in a 45 pip range (97.25 to 97.70).
Levels of interest:
Support Zones
- Current Range Lows: 97.20
- Current Low Consolidation Support 97.00 Zone
- 2025 Lows 96.50
Resistance Zones
- Immediate Pivot 97.60 to 97.80
- Current Resistance 98.00 Zone
- 4H MA 200 98.20
- Main Resistance 99.20 to 99.40
Safe Trades!
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