The US dollar extends its recovery driven by trade while markets expect key US economic data.

• The US dollar remains firm after its greatest daily gain since May, promoted by the commercial agreement between the US and the EU.
• The dollar index (DXY) has risen more than 2.0% in July, on the way to its first monthly gain since December.
• Operators expect key economic data on Tuesday, including the consumer confidence index and Jolts job offers data.

The US dollar (USD) remains firm on Tuesday after registering its highest gain in a single day since May, up 1.0% on Monday. The recovery occurred after the United States (USA) and the European Union (EU) announced an important commercial agreement on Sunday. The markets received the news with pleasure, seeing the agreement strongly inclined in favor of Washington. Investors are committed to the agreement granting the US more economic and strategic power, increasing confidence in the dollar.

The dollar index (DXY), which measures the dollar against a basket of six main currencies, is consolidating the strong profits of Monday during European negotiation hours. Until now, the index is around 98.89, slightly below the intradic peak of 99.05 reached during the Asian negotiation, the highest level since June 23.

The dollar index reached its lowest level in more than three years on July 1, falling to 96.38. Since then, he has been recovering constantly and is now on his way to his first monthly gain since February, going up more than 2.0% so far this month. The recovery has been promoted by the decrease in commercial tensions before the deadline of August 1, with new agreements reached with important partners such as EU and Japan, as well as with smaller economies such as Indonesia, Philippines and Vietnam. The solid economic data of the United States have also played a key role, reducing the expectations of an interest rate cut by the Federal Reserve (Fed) on Wednesday and adding more support to the US dollar.

Facing the future, the US economic calendar on Tuesday will be followed closely, with the publication of the housing price index, consumer confidence data and the Jolts employment offers report. The consumer trust index is expected to improve at a maximum of two months in 96.0 compared to 93.0 in June. June Jolts survey is expected to show around 7.5 million job offers, offering new perspectives on labor market conditions. These publications could shape the next action of the US dollar before the FED monetary policy decision on Wednesday, especially if they continue to point to an underlying fortress in the US economy.

Market movements: commercial optimism raises the US dollar

• The newly announced commercial agreement between the US and the EU is an important engine of the recovery of the US dollar this week. Revealed on Sunday, the agreement avoided a harmful tariff stagnation and granted significant concessions to Washington. According to the agreement, the US will impose a 15% base tariff on most EU imports, well below the 30% that had originally threatened, but even above 10% base tariffs. Strategic goods as components of aircraft, semiconductors and certain pharmaceutical and agricultural products received exemptions, preserving key supply chains. In return, the EU promised to buy 750,000 million dollars in American energy, mainly liquefied natural gas (LNG), over the next three years, and promised another 600,000 million dollars in long -term investment in the US economy.
• The 600,000 million dollars will completely come from private funds. According to the Commissioner of Commerce of the European Commission (CE), Maroš ŠEfčovič, and CE officials who spoke with Political, the European Commission will not play any role in reaching 600,000 million dollars, and the amount will come from private companies. This differs significantly from the Japanese agreement, where organizations supported by the Government will lead the administration of their investment.
• At the beginning of the month, the commercial agreement between the US and Japan occupied the center of the stage, which reduced the tariffs proposed above on cars from 27.5% to 15%, while Japan committed to an unprecedented investment package of 550,000 million dollars in the US to support critical sectors such as semiconductors, energy, pharmaceutical products, naval construction and car construction.
• The operators are attentive to the ongoing commercial discussions between the US and China in Stockholm, which resumed today after concluding the first round of conversations on Monday. High -level officials on both sides, including the US Treasury Secretary, Scott Besent, and the Vice Prime Minister of China, He Lifeng, are gathering to explore an extension of the current tariff truce that expires on August 12.
• The US Treasury has announced a massive indebtedness plan for the second half of 2025, pointing out 1.6 billion dollars in new net marketable debt – 1.00 billion dollars in the third quarter and 590,000 million dollars in the fourth quarter. Although around 500,000 million dollars are destined to rebuild the general treasure account (TGA) instead of new expenses, the magnitude of the issuance is exerting renewed pressure on bond markets. The moment is difficult, the yields are already high throughout the curve. The 30 -year yield is around 4.96%, the 10 -year -old at 4.41%, and even the 2 -year -old is approaching 4%. With the interest costs of interest, the government is now refining the debt at rates much higher than the levels close to zero that defined the last decade. This adds tension to fiscal perspectives and raises questions about how long the treasure can sustain such high costs of indebtedness without displacing private investment.

Technical analysis: DXY recovery is strengthened as the RSI and MacD support a greater rise

The dollar index (DXY) continues to build its bullish impulse, quoting around 98.89 in Tuesday’s session. The index has extended its recovery after successfully retesting the upper limit of a descending wedge pattern, which broke earlier this month. The ascending movement is further validated by a sustained movement above the 50-day exponential (EMA) mobile average in 98.54, which now acts as an immediate support, followed by the 97.80-98.00 area. The next resistance zone is located at 99.42, the maximum of June 23, followed by the 100 -day EMA at 99.97. Keeping successfully above 98.50, which is closely aligned with the 50 -day EMA, would reinforce the upward structure and keep the dollar index on the way to challenge the next levels of resistance.

Impulse indicators support bullish bias. The relative force index (RSI) is currently going around 59, indicating a growing shopping force with greater rise before possible saturation. Meanwhile, the convergence/divergence indicator of mobile socks (MACD) continues to strengthen, with both MACD lines and ascent signal and the bars of the histogram expanding in positive territory.