The U.S. dollar has resumed its rally after starting the first week of July on the back foot when it was hit by profit-taking following a three-month winning streak. Now that the Dollar Index has turned positive on the month could it finish the month of July higher, too? Investors have been piling in on the dollar because of higher interest rates in the United States and expectations that monetary conditions will tighten further in the coming months.
U.S. benchmarks are extending gains for a fourth consecutive day and the S&P traded to the highest level since March 13th. The overnight high of 2797.75 took out the June 13 high of 2796. What trade war? Of course, at these levels markets are not pricing in the risk of an escalating trade war.
As expected, gold made nice three waves of correction back to projected 1250 support level, but there can be room for deeper and more complex correction down to around 61,8% Fib. retracement and 1245 level.
The U.S. dollar ended higher for the third consecutive month in June and made a positive start to the new month and quarter on Monday. However, today it has given up Monday’s gains and was, therefore, trading flat on the week at the time of writing.