US Dollar Steady Awaits FOMC Minutes

• The DXY remains neutral, trading at 104.25 points, and is preparing for a calm start to the week.
• Weaker data is driving Fed officials' cautious stance, and financial conditions are improving.
• Markets continue to bet on a easing cycle starting in September, Wednesday's FOMC minutes will be key.

The US Dollar Index (DXY) starts the week on a calm note, trading at 104.25, registering negligible changes despite recent poor data results. The Federal Reserve (Fed) remains cautious about a premature cut as financial conditions continue to ease.

The US economy is showing signs of unwavering stability, even though the latest data reveals some underperformance. However, the Fed remains vigilant and hesitates to resort to premature easing as financial conditions continue to ease. April inflation and retail sales data disappointed last week, and markets will look to S&P data later this week for more information on the health of the US economy.

Daily Market Summary: US Dollar Steady, Markets Await Drivers

• Fed officials remain cautious on a timetable for cutting interest rates, with incoming data set the timing of the easing cycle.
• The odds of a cut in June and July remain low, so investors are delaying the first cut to September.
• Treasury yields are rising, with the 2-year yield at 4.83%, the 5-year yield at 4.44%, and the 10-year yield at 4.42%.

DXY Technical Analysis: DXY Struggles for Momentum as Both Bulls and Bears Fight for Dominance

The indicators on the daily chart reflect an indecisive market waiting for impulses. The flat position of the RSI in negative territory reveals the conflict within the market, detailing the fight between buyers and sellers. Furthermore, the moving average convergence divergence (MACD) histogram, which shows flat red bars, supports this idea that the bears are trying to take control in the short term.

Simple moving averages (SMAs) partially tell a similar story. The index is trading below the 20-day SMA, indicating that the bears have gained ground recently. However, the fact that the DXY is holding above the 100-day and 200-day SMAs suggests that long-term bullish momentum cannot be completely ruled out.