Dollar (DXY) Pauses At 98.00 As Markets Await Clarity – What’s Next?

Technical Analysis

Summary:

The morning NA session follows a quasi-dead European overnight trading.

This tends to happen when a lack of data adds to the Summer trading when volumes are typically subdued.

The Dollar Index had been in the middle of many headwinds, as per usual. After a stellar July followed by and N-shaped (for nope) downward spiral in the beginning of August, it has been difficult to spot where the Greenback is heading.

Forex volatility tends to calm during summers and lack of decisive trends exacerbate this rangebound trading – When the path is unclear, rangebound trading is typical (particularly in currencies.)

With Markets awaiting more developments after the White House gathered heads from Russia, Ukraine and the EU, the Dollar is forming a temporary bottom around the 98.00 Handle.

This region had already formed the post-Liberation day bottom (quickly broken in May).

The White House meetings went well and the US will now attempt to create a Putin-Zelenskyy meeting.

Donald Trump, the author of the Art of the Deal, is an unpredictable leader but one sure thing, he is a monster negotiator, and this is giving back some confidence in the US.

In our most recent DXY analysis, we mentioned an expectation of a more balanced Dollar as a lack of continuation upwards and a not-broken bottom show indecision.

Let’s see if this indecision shall continue, at least to the technical side.

Dollar Index (DXY) Technical Analysis

Dollar Index Daily Chart

Dollar Index Daily Chart, August 19, 2025 – Source: TradingView

The US Dollar is holding its low-sloped ascending channel in a 5 day consolidation around the 98.00 handle.

The post-CPI data had created a new offer for the US Dollar as Markets rushed to price the September cut to 97% before the surprising PPI data changed the course of action.

With the future US inflation expectations rising considerably, the fundamental background for the Dollar (like its rate outlook) is more uncertain.

The Daily RSI is way into the Neutral territory and the Daily doji is an indecision one. All of this is also happening right around the 50-Day MA (currently at 98.065).

Let’s have a closer look to spot what breakout points could be in play when the action picks up again.

Dollar Index 2H Chart

Such indecisive price action doesn’t warrant analysis across many timeframes – it is better in this environment to look at where we see the most.

Dollar Index 2H Chart, August 19, 2025 – Source: TradingView

The Dollar Index is stuck between the 97.60 Support and the 98.50 Resistance Zones.

With the Price action rebounding from the lows of the Daily upward Channel supplemented by the 2H MA 50 acting as support, it seems that the preferred path would be to the upside.

If things were so sure however, the Dollar would have risen already to test the following resistance zone.

Typically, in this environment, it is good to look at the highs (98.30) and lows of the session (97.94) to see where if the action breaks out from there.

To the upside, look at the 2H MA 200 currently at 98.515.

To the downside, look at the 97.60 Support Zone, then the 97.15 July upward pivot.

Levels to place on your DXY Charts:

Resistance Levels

98.50 Pivot Zone now resistance (confluence with 2H MA 200)
Resistance 99.20 to 99.40
Main 100.00 to 100.50 Resistance

Support Levels

2H MA 50 (97.94)
97.60 Support
July Pivot before run-higher 97.15

Safe Trades!

Source: ACTIONFOREX

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Adam

Economic

Despite the Federal Reserve restricting the economy; a new, protectionist trade regime; and seemingly never-ending uncertainty, the American consumer is still powering through it.

At several key moments over the past year, as sentiment flagged and talk of a coming slowdown grew louder, spending data acted like a jolt of energy, a slap in the face of pessimistic readings of the economic outlook.

But viewing the resilience of the American consumer through the lens of a K-shaped economy, observing the sharp divergence between top earners and the rest of the population, helps explain why those things can be happening at the same time.

This week will deliver more insight into the strength of the consumer via scouting reports from the other side of the cash register.

Retail giants Home Depot (HD), Lowe's (LOW), Target (TGT), and Walmart (WMT) are reporting earnings and outlooks, helping shed light on the impacts of tariffs and how households are coping with pricing pressures. Areas of growth or stagnation will also hold importance, as the shopping dynamics of putting off purchases, bargain hunting, and trading down can signal how consumers are interpreting and reacting to their own financial standing.

Even when spending in aggregate increases, drilling down into who and where the boosts are coming from and going to can be revealing. Total credit and debit card spending per household increased nearly 2% in July, compared to a year ago, according to a new report from the Bank of America Institute. But, while that figure looks encouraging, the report noted that a widening gap has opened up between lower-income households and higher-income cohorts and "is the largest since February 2021."

Results in other sectors have already shown elements of unbothered consumption on the one hand and more cautious spending on the other. Airlines, for instance, showcased a tidy contrast between affluent consumers and everyone else. At Delta (DAL), premium ticket sales rose 5%, while main cabin revenue fell 5% last quarter, underscoring the economic split.

A paper published last week by the Boston Fed, examining the resilience of consumer spending since 2022, supports the K-shaped framing.

"Credit card data indicate that since 2022, spending by higher-income consumers has remained resilient and has been driving growth in aggregate spending," the paper found. "By contrast, spending growth of low-income consumers has not been as strong."

Retailers will tell us more. The engine room of the nation's GDP has been humming along. But it's worth pinpointing where all that resilience is coming from.

Source: finance.yahoo

To stay updated on all economic events of today, please check out our Economic calendar

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Winkelmann

Economic

Commodity

Forex

World cocoa prices are currently on the rise, thus making the crop a commodity with high potential to generate lucrative returns.The Malaysian Cocoa Board (LKM) in a statement on Tuesday said that in 2024, the average price of dry cocoa beans grew by 141% to RM24,274 per tonne compared to RM10,073 per tonne in the previous year.“The Cocoa Cultivation Promotion Programme for the Plantation Sector will be implemented by the board from 2025 to 2030 with an allocation of RM550,000 per year.

“Via this programme, LKM will distribute high-quality cocoa seedlings for free, provide technical guidance, practical training and continuous monitoring to ensure that cocoa planting is carried out according to the best agricultural practices,” the board said.So far, it said, several Malaysian plantation companies have participated in the programme, with a total area of 360 hectares.Companies selected to participate in the programme would receive incentives in the form of 5,000 high-quality cocoa seedlings worth RM50,000, in addition to technical advisory services including nursery development, planting systems and others, it said.

“Within five years, the programme aims to expand the cocoa plantation area by 2,750 hectares nationwide.“The plantation sector is an important driver in increasing cocoa production sustainably to meet the demand of local manufacturers, while supporting efforts to make Malaysia a producer of premium cocoa and ‘single origin’ cocoa beans, which are increasingly gaining traction in the world market,” said LKM.Earlier, LKM organised the Cocoa Cultivation Promotion Engagement Programme for the Plantation Sector for the Sarawak Region here on Tuesday.

Officiated by the Ministry of Plantation and Commodities’s cocoa and pepper industry development division secretary Cheah Chee Fong, the event was attended by 94 participants, consisting of plantation companies, individual entrepreneurs, farmer groups, and representatives of relevant government agencies.It aimed to provide information on the incentives offered to plantation companies to cultivate cocoa crops, as well as the potential of the industry.

Source: Theedgemarkets

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Glendon

Economic

Forex

Headline CPI inflation for July came in at 1.7% year-on-year (y/y), cooling from the 1.9% in June and below expectations for a 1.8% y/y print.

Gasoline prices falling 0.7% on the month on lower geopolitical tensions and increased OPEC+ output were a drag on the index.

Shelter price inflation rose for the first time since February 2024, rising 3.0% y/y from 2.9% in June. This was mostly attributed to a greater influence from the natural gas and rent indexes. The contraction in natural gas prices slowed in July, propping up shelter costs while tent inflation increased to 5.1% y/y, from 4.7% in June.

The Bank of Canada’s (BoC) CPI-trim measure was unchanged for the third month in a row at 3.0% y/y, while the CPI-median index ticked higher to 3.1% y/y. The CPI excluding food and energy ticked down to 2.5% y/y from 2.6% the month prior and the CPI excluding the eight most volatile components and indirect taxes (CPIX) also took a step back to 2.6% y/y (from 2.7% in June). All four of the core measures decelerated on a seasonally adjusted monthly basis in July, with the trim and median registering 0.18% m/m and 0.19% m/m, respectively, while the CPI excluding food and energy and CPIX were effectively flat at 0.06% m/m.

Key Implications

Energy prices continue to do the heavy lifting on the top-line measure, but the softer trend in core inflation is what really jumps out from this report. The monthly pattern is suggestive of an economy where prices pressures are increasingly offset by growing economic slack.

On a go-forward basis this report builds on what we saw last month, slowing momentum in core prices as slack in the economy builds. Between February (when trade tensions really flared) and July the economy has added a total of 27k jobs, and now core inflation appears to be losing steam. All together this looks like the scenario the BoC highlighted as giving rise to the “need for a further reduction in the policy interest rate”. From our lens, we think the BoC will have room to deliver more easing later this year as the economic slack continues to build and offset inflation pressure.

Source: ACTIONFOREX

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Adam

Stocks

SoftBank’s $2B Investment Reignites Interest in Intel Stock

Intel shares have regained investor attention following a $2 billion equity investment from SoftBank, signaling a renewed vote of confidence in the chipmaker’s turnaround plan. The deal, priced at $23 per share, makes SoftBank Intel’s sixth-largest shareholder and marks a rare public bet by Masayoshi Son on a traditional semiconductor name. Traders are viewing this as a key validation point, especially after Intel’s prolonged underperformance.

SoftBank’s stake, representing just under 2% of Intel’s shares, is purely financial—there’s no board representation, and no commitments on chip purchases. Yet, the investment suggests a belief that Intel is positioned to play a central role in U.S.-based semiconductor manufacturing. It also comes at a time when Intel is trying to recover from an $18.8 billion loss and sharpen its competitive stance against AMD, Nvidia, and TSMC.

Federal Backing and Strategic Leadership Add Tailwinds

Intel’s recovery narrative is gaining momentum not just from SoftBank, but also from potential government support. Reports of Washington considering a 10% equity stake underscore Intel’s strategic importance to national tech infrastructure. Combined with new CEO Lip-Bu Tan—formerly on SoftBank’s board—Intel now appears better positioned to access capital, political support, and key industry relationships.

This backing is crucial as Intel tries to rebuild its foundry ambitions and claw back lost market share. The company’s dual role as both designer and manufacturer gives it a rare position in the U.S. chip ecosystem, offering traders a long-term angle that extends beyond quarterly earnings noise.

Technical Setup Signals Bullish Breakout Potential

Weekly Intel Corporation

From a technical standpoint, Intel has established a strong support base on the weekly chart between $17.67 and $27.55. Trading near $24.56, the stock remains above key support levels—the 50-week moving average at $21.80 and the 50% retracement level at $22.61. This setup suggests dips may be limited and well-supported.

A breakout above the February high at $27.55 could trigger momentum-driven buying. If that level clears, the next resistance zones sit around $33.01 (200-week MA) and $34.48, offering up to 40% upside from current prices. Risk remains tied to tech sector volatility, which could drag Intel lower regardless of its internal progress.

Market Outlook: Cautiously Bullish with Sector Risk Caveats

Intel offers a compelling risk-reward profile for traders looking at strategic plays in the semiconductor space. SoftBank’s investment and potential U.S. government backing provide meaningful support for the stock’s recovery narrative. With strong technical footing and identifiable upside targets, Intel looks poised for a push toward $27.55 and beyond.

However, broader tech weakness remains a key risk. Traders should manage exposure accordingly, recognizing that Intel’s rebound, while promising, may be vulnerable to sector-wide selling pressure.

Source: fxempire

Risk Warnings and Disclaimers

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Michelle

Forex

Economic

While Malaysia's exports saw a stronger-than-expected rebound in July, economists say the country's overall trade outlook remains clouded by the risks of US tariffs and softening global demand.

Malaysia's exports climbed 6.8% year on year to RM140.45 billion — the highest since September 2022 — reversing two consecutive months of contraction, thanks largely to a 22.5% jump in electrical and electronics (E&E) shipments, according to the Ministry of Investment, Trade and Industry (Miti).

While the rebound offered short-term relief, RHB Investment Bank said it maintains "a cautious view on the trade outlook, as the impact of tariffs would gradually set in later in the year, likely affecting Malaysia’s trade and manufacturing sectors".

In a note, the bank added that two factors could support exports in the second half of 2025, namely "clearer guidance on US tariffs on Malaysia and easing US–China trade tensions". It also flagged the potential introduction of sector-specific levies, particularly on semiconductors, as a key downside risk.

Front-loading lifts shipments

UOB Global Economics & Markets Research said July's positive surprise was mainly a result of "revived front-loading activities ahead of higher US reciprocal tariffs confirmed on Aug 1 and effective from Aug 8".

While UOB has maintained its full-year export growth forecast at 3.8%, it cautioned that Malaysia’s trade outlook for the remainder of the year is still subject to downside risks, including the progress of the US-China trade truce, the confirmation of sector-specific tariffs, the effects of higher reciprocal tariffs, and weaker demand.

Similarly, MBSB Research expects a moderation after July's surge, reflecting a more cautious outlook amid ongoing trade uncertainties. While E&E exports provided a buffer, MBSB warned that "the 19% US tariff on Malaysia’s exports is expected to lead to slower trade in the latter part of the year, with softer demand from key trading partners adding to the downside risks."

The research house added that "efforts to diversify markets and deepen bilateral ties should cushion the US tariff impact, while resilient domestic consumption will remain a key driver to sustain growth in Malaysia’s economy amid external uncertainties".

CIMB Treasury and Markets Research, who also noted that the July rebound was partly fuelled by tariff-related front-loading, noted this was especially for E&E shipments through Singapore. "Growth in exports to the US, Hong Kong, and Singapore was partly driven by tariff-related front-loading, while higher imports from mainland China and Taiwan point to stockpiling of intermediate goods," it said.

According to Miti, July's export rebound was also supported by gains in optical and scientific equipment, processed food, and machinery, equipment and parts. However, petroleum products, palm oil, and liquefied natural gas exports contracted.

Imports rose 0.6% year-on-year, driven by capital goods, while intermediate and consumption goods saw a decline. This lifted the trade surplus to RM14.98 billion, more than double the previous month.

Source: Theedgemarkets

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Stocks

European stocks edged higher on Tuesday as global markets reacted positively to the outcome of talks between U.S. President Donald Trump, Ukrainian President Volodymyr Zelenskyy and European leaders at the White House on Monday.

The pan-European Stoxx 600 was 0.1% higher by 8:11 a.m. in London (3:11 a.m. ET), with most sectors in positive territory.

Defense stocks were among the worst performers in the index during early trade, as investors digested the news of talks in Washington. The Stoxx Europe Aerospace and Defense index was last seen trading 2.2% lower.

German tank parts manufacturer Renk was 6.7% lower, Italian defense giant Leonardo shed 6.6%, Germany’s Hensoldt lost 6% and Sweden’s Saab

was down 5.5%.

At the closely watched talks on Monday, Trump said peace negotiations can take place while both countries are still fighting, dropping his earlier calls for a ceasefire. He also said security guarantees for Ukraine would be “provided” by European countries with “coordination with the U.S.”

Zelenskyy said a package of coveted security guarantees for Ukraine — expected to include a massive purchase of American weapons — would be “formalized on paper within the next week to 10 days.”

The U.S. president also said a meeting between Russian President Vladimir Putin and Zelenskyy is being planned, to be followed by a trilateral meeting which will include Trump.

Asia-Pacific markets traded mixed overnight following declines on Wall Street, while U.S. stock futures ticked down early Tuesday ahead of key speeches from Fed officials this week.

Central bank officials from around the globe will convene in Jackson Hole, Wyoming, for the Fed’s annual economic symposium which begins Thursday. Investors are awaiting clues from Fed Chair Jerome Powell as to what will happen at the central bank’s remaining policy meetings this year.

The Fed funds futures market is indicating an 83% chance for a quarter-point rate cut at the Fed’s next policy meeting in September, according to CME’s FedWatch tool.

There are no major earnings or data releases in Europe on Tuesday.