Macroeconomic data is still sending a negative signal to the US dollar. The greenback paused after the data showed US consumer confidence fell to its lowest level in more than six years. This means that even as new home sales and manufacturing activity have increased in the Richmond district, lower consumer confidence in August is likely to cause a slowdown in overall economic activity.

Meanwhile, traders are looking ahead to Jerome Powell's speech at the annual Jackson Hole meeting. Markets widely expect him to give details on what steps the Fed is going to take to secure the economic recovery. Ahead of this event, which is considered the most important this week, short potions prevail on the US dollar.

Market players expect the greenback to ease further against the basket of six major currencies. The reason for this is the intention of the Federal Reserve to provide full support to the country's economy against the backdrop of negative real yields.

The head of the US regulator is expected to take a more dovish stance on the monetary policy. According to experts at MUFG Bank in Tokyo, interest rates may remain low for a long time, thus causing a new wave of decline in the US dollar. Analysts called the current trend a stage of correction in "the long-term weakening of the dollar, which has recently become excessive."

Fundamentally, the US dollar is set to decline further, while technical analysis shows that a moderate rise is also possible in the short term.

The USDX is likely to rebound as well. The last trading week of August is usually associated with month-end book keeping and accounting. This could naturally spur the demand for the US dollar. So that may be the reason for the current upward correction.