US Dollar Index recedes from tops, back near 97.50

• DXY’s recovery loses momentum and returns to 97.50.
• Markets’ focus remains on the re-opening of the economy.
• Chicago Fed Index, Existing Home Sales next on the docket.

The greenback, in terms of the US Dollar Index (DXY), lost some upside momentum in the 97.70 region and now retreats to the mid-97.00s at the time of writing.

US Dollar Index looks to data, COVID-19

The index has started the week on the defensive following four consecutive daily advances, with the upside momentum running out of steam in the vicinity of the Fibo level at 97.87 so far.

In the meantime, the dollar continues to look to the progress of the re-opening of the US economy for near-term direction, although the advance of the coronavirus pandemic remains far from abated and keep occasional bearish moves in the buck somewhat contained.

Later in the NA session, the Chicago Fed National Activity Index is due later seconded by Existing Home Sales for the month of May.

What to look for around USD

The index has met important resistance in the 97.70/80 band so far, bolstered by renewed safe haven demand in response to the re-emergence of coronavirus jitters. Other than that, and as usual in past weeks, price action around DXY is expected to track the performance of the broad risk appetite trends, US-China trade developments and the developments from the re-opening of the economy. On the constructive stance around the buck, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value.

US Dollar Index relevant levels

At the moment, the index is losing 0.12% at 97.54 and faces initial contention at 96.03 950% Fibo of the 2017-2018 drop) followed by 95.72 (monthly low Jun.10) and then 95.03 (2019 low Jan.10). On the flip side, a break above 97.74 (weekly high Jun.22) would aim for 97.87 (61.8% Fibo of the 2017-2018 drop) and finally 98.39 (200-day SMA).