Current trend

The USDX index is showing mixed dynamics, consolidating near 101.30 and waiting for new drivers to emerge. In the last two trading days, the instrument managed to show quite active growth and even briefly update the local highs of August 21. At the same time, the positions of the American currency remain under pressure against the backdrop of the upcoming reduction in borrowing costs by the US Federal Reserve during the September meeting. The Fed Chairman Jerome Powell confirmed this when he spoke at the Jackson Hole Economic Symposium late last week. At the same time, markets still do not have a unified opinion regarding the volume of the first easing of monetary policy. The main scenario still assumes a correction of the rate by only –25 basis points, but a reduction of 50 basis points is also possible. In this regard, it is worth noting the comments of the President of the Federal Reserve Bank of Atlanta (FRB) Raphael Bostic, who said the day before that the time has come to change the course of monetary policy, but before taking serious steps, it is necessary to analyze the employment and inflation reports, which are due to be published before the regulator's meeting on September 17-18.

Today at 14:30 (GMT 2), investors will be assessing statistics on the Personal Consumption Expenditures Price Index, a key indicator for assessing average inflation, which influences the authorities' decisions in the field of monetary policy. Analysts expect a slight increase in the Core PCE in July from 2.6% to 2.7%, and in the PCE — from 2.5% to 2.6%. In turn, Personal Income will likely remain at the same level of 0.2%, and Spending will rise from 0.3% to 0.5%. Also, at 16:00 (GMT 2), the University of Michigan's Inflation Expectations report, a monthly survey measuring the percentage change in the cost of goods and services over the next 12 months, is due to be released: the figure could be around 2.9%.

Support and resistance

Bollinger Bands on the daily chart show a steady decline. The price range is narrowing, indicating the emergence of a corrective upward trend in the ultra-short term. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic shows similar dynamics but is rapidly approaching its highs, which reflects growing risks of the overbought index in the ultra-short term.

Resistance levels: 101.67, 102.00, 102.23, 102.45.

Support levels: 101.20, 100.80, 100.35, 100.00.

Trading tips

Long positions can be opened after a breakout of 101.67 with the target of 102.45. Stop-loss — 101.20. Implementation time: 2-3 days.

The return of "bearish" trend with the breakdown of 100.80 may become a signal for new sales with the target at 100.00. Stop-loss — 101.20.