The dollar finds support in the middle of the uncertainty of the Fed and a renewed commercial optimism

• The US dollar is strengthened for the second day on Friday, supported by solid economic data from the US and a commercial feeling in improvement.
• The markets remain cautious waiting for the decision of the Federal Reserve next week and the deadline of tariffs on August 1.
• The US dollar index (DXY) trades about 97.80 after finding a strong support at the psychological level of 97.00.

The US dollar (USD) is quoted with a positive tone for the second consecutive day on Friday, obtaining US optimistic economic strength and a new optimism in trade. On Thursday, the initial applications of weekly unemployment better than expected and the stable figures of the purchasing managers index (PMI) helped relieve concerns about a recession, supporting the opinion that the US economy is still resistant. At the same time, recent progress in bilateral tariff agreements between the United States (USA) and Japan, Indonesia and the Philippines has improved the feeling of risk, thus limiting the pressure on the dollar.

The US dollar index (DXY), which measures the dollar against a basket of six main currencies, is modestly rising during Friday’s European negotiation hours, recovering from a minimum of two weeks reached at the beginning of the week. At the time of writing, the index is around 97.76, 0.27% more in the day. However, the caution prevails before the deadline of tariffs on August 1 and the monetary policy decision of the Federal Reserve (Fed) next week, keeping the operators in suspense and limiting the aggressive positioning in the US dollar.

The president of the USA, Donald Trump, monopolized holders on Thursday with a rare visit to the Fed headquarters in Washington, the first of an acting American president to the Central Bank in almost two decades. Trump toured the renewal project of 2.5 billion dollars from the Fed with the president of the FED, Jerome Powell, and Senator Tim Scott. During the visit, Trump claimed that the project had exceeded the budget, stating that the costs had increased to 3.1 billion dollars. Powell responded immediately, clarifying that the additional amount referred to a building completed five years ago and did not reflect real overload costs.

Trump also used the visit to renew the pressure on the Fed to cut the interest rates, saying that the Central Bank is “moving too slow” and should do more to support growth. However, he added that he has no “plans” to dismiss Powell from his position, for now. The visit, although framed as a tour, clearly had political nuances and revived the debate on the independence of the Fed. With the next Fed policy meeting only days away, the markets are closely observing how the Central Bank responds to the growing political pressure.

With the Fed monetary policy decision scheduled for Wednesday, markets expect interest that interest rates remain stable, with most forecasts pointing to September as the earliest. According to a recent Reuters survey, 100% of economists anticipate that the Fed will maintain its reference rate in the range of 4.25% -4.50% next week.

Market movements: markets in suspense before the FED policy decision and the commercial deadline

• The 10 -year American treasure bonus yield is maintained around 4.39% on Friday, stabilizing after a volatile week while investors act cautiously before the Federal Reserve Policy meeting next week. Currently, the markets are valuing 43 basic points of rates cuts by the end of 2025, with expected reductions in September and December. Stable performance reflects uncertainty about inflation perspectives, the impact of tariffs and the widest direction of monetary policy.
• The United States has so far sealed five commercial agreements with key partners, including Japan, Philippines, Vietnam, Indonesia and the United Kingdom, and has reached a preliminary agreement with China. The conversations are still ongoing with the European Union, South and Indian Korea, while the main commercial partners rush to finish negotiations before the deadline of tariffs on August 1. The EU is pressing for a modeling agreement according to the US agreement.-Japan, looking for a 15% base tariff and exemptions for key sectors, such as cars and pharmaceutical products, to avoid a higher tax of 30%.
• South Korea Industry Minister Kim Jung-Kwan, and Commercial Envoy Ye-Koo are scheduled to meet with US Secretary of Commerce, Howard Lutnick, Friday in Washington, while both parties enter the final stretch of the conversations. Seoul is offering an investment package of 100 billion dollars of large companies such as Samsung and Hyundai to help ensure an agreement and avoid the threat of 25% tariffs on key exports.
• The president of the USA, Trump, arrived in Scotland on Friday for a visit of several days that combines business and diplomacy. Trump is expected to meet with the Prime Minister of the United Kingdom, Keir Starmer, on Monday, with commerce and tariffs as a key approach. The US tariffs on the main British exports, including steel, whiskey and pharmaceutical products, while preparing a refined version of the existing commercial pact.
• On Wednesday, Trump reiterated his hard commercial position, announcing that future tariffs on US business partners would range between 15%and 50%, compared to their previous proposal of a 10%base tariff. He made it clear that only the countries willing to completely open their markets to US goods and services would be offered some tariff relief. For those who are not willing to participate in reciprocal trade, complete punitive tariffs would be applied.
• A division among Fed officials is feeding the debate on the decision of Julio’s interest rates. The moderate voices, including Governor Christopher Waller and the vice president of supervision, Michelle Bowman, support a 25 -point rate cuts this month, citing that recent tariffs are promoting a temporary increase in inflation and that a relief could now protect the economy from slower growth. In contrast, the president of the FED, Jerome Powell, and most officials favor a more cautious approach. They warn that early relief could rekindle pressure on prices if inflation related to tariffs turns out to be more persistent than expected.
• The US will publish the requests for lasting goods from June on Friday at 12:30 GMT, with the markets waiting for a strong fall of -10.8%, after the strong increase of 16.4% of May driven by aircraft orders.

Technical analysis: DXY finds support about 97.00 while developing a bullish correction

The American dollar index (DXY) is rising on Friday after having successfully retested the upper limit of a descending wedge pattern, which broke decisively last week. The dollar index (DXY) found a strong support near the key psychological brand of 97.00 on Thursday, since buyers intervened to defend the level and relive the bullish impulse.

The price action is now in ascending trend, with the first great obstacle seen around the 97.80-98.00-a resistance area that was previously support and also coincides with the 21-day exponential mobile (EMA) mobile average. A sustained rupture above this region could open the door for a maximum test last week at 98.93, with intermediate 50 -day EMA resistance in 98.52.

In the lower part, a daily closure below 97.00 would annul the bullish correction structure and could point out a new wave of selling pressure, with the index probably returning to the lower limit of the wedge or even resetting the minimum of several years of 96.38 established on July 1.

The 14 -day relative force (RSI) index is currently in 47 and points to the north, pointing out a modest recovery from recent minimums. However, it is still under the 50th neutral brand, indicating that the bullish impulse is still tentative.