US Dollar drops to 2-day low on US data, eyes on trade

• The index tumbles further to the vicinity of 94.30, fresh 2-day lows.
• Yields of the US 10-year reference rebound to 2.95%.
• US New Home Sales came in at 631K in June, below consensus.

The US Dollar Index (DXY), which gauges the buck vs. a basket of its main rivals, remains on the defensive in the 94.35/30 band, or new 2-day lows.

US Dollar focused on Trump-Juncker meeting

The index dropped further on Wednesday amidst increasing cautiousness over the imminent meeting between President Trump and J.C.Juncker, Head of the European Commission.

Trump and Juncker are meeting later today in order to avert another front in the ongoing trade war, where jitters among investors have been on the rise in light of the probable US tariffs on the European autos sector.

Also weighing on the buck, New Home Sales missed forecasts in June, contracting more than expected 5.3% on a monthly basis, or 631K units from May’s 666K units.

In the meantime, DXY keeps the daily sideline theme prevailing since mid-June, although it needs to break out recent tops around 94.90 to allow another visit to the 95.00 milestone and above.

US Dollar relevant levels

As of writing the index is down 0.12% at 94.48 and a breakdown of 94.27 (55-day sma) would aim for 94.21 (low Jul.23) and finally 93.71 (low Jul.9). On the flip side, the initial up barrier lines up at 94.85 (high Jul.24) seconded by 95.53 (high Jun.28) and then 95.65 (2018 high Jul.19).