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Why did Powell suddenly let go as the US dollar index rebounded?

Post time: 2025-08-26 views

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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Platform]: The US dollar index rebounded, why did Powell suddenly let go?" Hope it will be helpful to you! The original content is as follows:

On August 26, early trading in the Asian market on Tuesday, Beijing time, the US dollar index hovered around 98.13. On Monday, as market optimism about the prospect of interest rate cuts subsided, the US dollar index rebounded and returned to above the 98 mark, eventually closing up 0.71% to 98.394. U.S. Treasury yields generally rose, with the benchmark 10-year U.S. Treasury yields closing at 4.276%, and the 2-year U.S. Treasury yields closing at 3.7340%. Due to the strengthening of the US dollar, spot gold fluctuated sideways in a narrow range of nearly $15, and finally closed down 0.19% to close at $3365.8/oz; spot silver fell even more, eventually closing down 0.72% to $38.57/oz. International crude oil rose for the fourth consecutive day. WTI crude oil rose above the key 100-day moving average, which stimulated some algorithmic buying. It once approached the $65 mark during the session and finally closed up 1.52% to $64.62 per barrel; Brent crude oil finally closed up 1.31% to $68.2 per barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovered at $98.13 US dollar rose against major currencies on Monday, rebounding from a sharp decline after Fed Chairman Powell's speech last week. His remarks reinforced expectations for a rate cut in September. Technically, the U.S. dollar index is trying to close above resistance at 98.00–98.20. If this attempt is successful, the U.S. dollar index will move to the next resistance level, which is in the 99.20–99.40 range.

Why did Powell suddenly let go as the US dollar index rebounded?(图1)

Euro: As of press time, the euro/dollar hovers around 1.1653. The euro/dollar erased part of its gains last Friday and fell 0.93% after Fed Chairman Jerome Powell made dovish remarks. Expectations that the Fed would cut interest rates in September triggered a rise in the euro (EUR). Technically, if the EUR/USD closes below 1.1666 of the 50 moving average, it will move to the next support level, which is in the range of 1.1575–1.1590.

Why did Powell suddenly let go as the US dollar index rebounded?(图2)

GBP: As of press time, GBP/USD is hovering around 1.3487. The pound/dollar fell back on Monday to the 1.3450 region after global markets reconsidered the rate cut frenzy caused by dovish perceptions of Fed Chairman Jerome Powell late last week. Powell's attendance at Jackson Hall Economics Seminar fueled the flames of weekend rate cuts, but now this week investors have the latest batch of key U.S. personal consumption expenditure price index (PCE) inflation data. Technically, the successful testing of the 1.3485–1.3500 support level will push the GBP/USD toward the next support level 1.3400–1.3415. RSI is in a mild area, so there is a lot of room for power in the short term.

Why did Powell suddenly let go as the US dollar index rebounded?(图3)

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On Tuesday, gold hovered around 3378.97. The market believes that the prospect of the Federal Reserve's interest rate cut in September is still variable. The US dollar index rose 0.49% on Monday, setting the largest single-day increase in the past month, suppressing the trend of gold prices. Moreover, there is a demand for a technical pullback after the gold price surged last Friday. Investors are waiting for this Friday's U.S. PCE inflation data, and this data storm may determine the directional breakthrough of gold in the next stage. Investors are waiting for this Friday's U.S. PCE inflation data, and this data storm may determine the directional breakthrough of gold in the next stage.

Why did Powell suddenly let go as the US dollar index rebounded?(图4)

Technical: If the global economic slowdown intensifies, gold's position as a safe-haven king will shine again, and the potential target may return to the highest point last week. Pay attention to the support of multiple moving averages near 3345-3350 below. If the gold price falls below the support near 3345, the gold price may test the 100-day moving average again, currently around US$3323.12.

2) Analysis of crude oil market trends

On Tuesday, crude oil trading around 64.25. Oil prices climbed about 2% on Monday, continuing last week's rally as tradersMore sanctions are expected on Russian oil, and Ukraine's attack on Russia's energy infrastructure could disrupt supply. Investors are waiting for the U.S. PCE inflation data this Friday, and this data storm may determine the directional breakthrough of gold in the next stage. Investors are waiting for this Friday's U.S. PCE inflation data, and this data storm may determine the directional breakthrough of gold in the next stage.

Why did Powell suddenly let go as the US dollar index rebounded?(图5)

Technical: Although geopolitical risks provide support for bulls, unless oil prices can stand firm above $65.00, the overall market tone will remain "neutral and bearish". $63.25 has now become the hub of long-short games: if oil prices can clearly break above $65 or fall below $63.25, it will provide crude oil traders with the next clear direction signal.

Forex market trading reminder on August 26, 2025

20:30Monthly rate of durable goods orders in the United States in July

21:00Monthly rate of FHFA House Price Index in June

21:00Monthly rate of S&P/CS20 major cities in June

22:00Monthly rate of housing price index in August

22:00 US Richmond Fed Manufacturing Index in August

The next day, Bank of Canada Governor McClum delivered a speech

The next day, 04:30 the next day, API crude oil inventories from the US to August 22

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