HSBC is looking for the USD to fall further, saying that with the end of the Federal Open Market Committee (FOMC) hiking cycle being near there are 3 triggers to watch for fresh weakness:

  1. risk appetite remaining strong
  2. US economic statistics not outperforming the rest of the world as much
  3. a sustained slowdown of global inflation, including a sharp decrease in US core inflation

HSBC says that the ideal situation would be for the US economy to perform a "soft landing" and for the rest of the world, especially China, to have some improvement (vs. expectations) in their economic growth outlook.

HSBC concludes:

  • Should these conditions occur, the range-bound USD is set to end and its downtrend should resume, and this is our central case through the rest of this year and into 2024

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DXY weekly candles:

DXY weekly candles 20 July 2023