USD index strengthens, potential changes in Fed rate cut outlook.

Recent data releases, including higher-than-expected jobless claims and PPI figures, indicate a slowdown in the US economy and easing inflationary pressures. This aligns with the majority of economists' expectations of an impending recession by the end of the year.

Some market predictions suggest that the Federal Reserve might initiate the first rate cut in September. However, historical data suggests that there is typically a gap of over six months between the end of a rate hike cycle and the first rate cut. If a rate cut occurs in September, the interval between the two actions would be relatively short.

Covenra analyst Joe Manimbo stated, "Despite cooling inflation, CPI data remains elevated, causing the market to reassess the Fed's rate cut prospects. If the market discounts the possibility of rate cuts, the US dollar stands to gain and appreciate."

From an Elliott Wave perspective, the US dollar is expected to undergo a downward correction, pausing near the 38.2% or 50% Fibonacci channel levels. Pay attention to the levels at 102.48 and 101.682.

Currently, the US dollar is showing a trend of oscillating upward. This may be attributed to the lower-than-expected CPI and PPI figures released by China yesterday, which has increased market confidence in the US dollar. Additionally, various supporting data in conjunction with the global economic strength of the United States suggests that while the US economy is slowing down, it remains robust on a global scale, attracting capital inflows into the US dollar market and driving up its price.

From a technical analysis perspective, key indicators indicate that both the Stoch and RSI indicators do not show clear overbought signals in the market. Although the rising RSI indicates strengthening buying pressure, it is still within controllable levels. The MACD indicator suggests that the market's bullish momentum is still somewhat dominant but shows signs of weakening.

Overall, the market appears to be in a relatively stable state with a balance between buying and selling pressures.