US Dollar Index struggles for direction above 96.00 ahead of data
- DXY reclaimed the 96.00 mark and above on Thursday.
- Markets’ attention remains on the headlines from the coronavirus pandemic.
- Housing data and the Consumer Sentiment index next of relevance in the US.
The greenback, when tracked by the US Dollar Index (DXY), is down smalls at the end of the week although it manages well to keep business above the 96.00 mark.
US Dollar Index looks to data and pandemic
The index is alternating gains with losses in the low 96.00s on Friday following Thursday’s moderate rebound after bottoming out in the key contention area in the 95.80/70 band.
Nothing of note in the macro context, where the relentless advance of the coronavirus pandemic continues to undermine the progress of the re-opening of the economy. Indeed, investors’ sentiment stays under the microscope amidst auspicious data from some US fundamentals, mixed corporate earnings results and the pick-up of infected cases in many US states.
Later in the NA session, Housing Starts and Building Permits are due seconded by the preliminary print of the Consumer Sentiment gauged by the U-Mich index.
What to look for around USD
The relentless advance of the COVID-19 pandemic in the US and across the world vs. news of a potential vaccine that could be developed before markets’ expectations plus the ongoing reopening of global economies are all driving the sentiment in the global markets and keep the dollar under pressure. On the constructive view of the dollar, 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 0.04% at 96.27 and faces the next support at 95.78 (low Jul.15) seconded by 95.72 (monthly low Jun.10) and then 94.65 (2020 low Mar.9). On the other hand, a break above 97.80 (weekly high Jun.30) would aim for 97.87 (61.8% Fibo of the 2017-2018 drop) and finally 98.20 (200-day SMA).