US Dollar Index clings to daily gains near 97.00
- 10th July 2020
- Posted by: Hakeem
- Category: FOREX MARKET ANALYSIS
- DXY adds to Thursday’s gains albeit still below the 97.00 mark.
- Markets’ attention shifted to increased coronavirus cases worldwide.
- Producer Prices will be the only release of note later in the NA session.
The greenback, in terms of the US Dollar Index (DXY), is trading on a positive note and adds to Thursday’s gains still below the 97.00 mark.
US Dollar Index looks to Trump, risk trends
The index managed to bounce off fresh monthly lows near 96.20 on Thursday on the back of a pick-up in the risk-aversion sentiment.
In fact, new coronavirus cases continue to emerge across the world and undermine the prospects of a strong recovery, lending at the same time fresh oxygen to the buck.
In addition, the US Supreme Court ruled that New York prosecutors can examine President Trump’s financial records, all after Trump failed to make his tax returns public.
In the US docket. Producer Prices for the month of June are only due later in the NA session.
What to look for around USD
The progress of the COVID-19 in the US remains in the centre of the debate amidst efforts to keep the re-opening of the economy well in place. As always, the broad risk appetite trends emerge as the main driver for the dollar in the short-term coupled with omnipresent US-China trade and geopolitical effervescence. 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. Playing against this, the ongoing (and potentially extra) stimulus packages by the Federal Reserve could limit the dollar’s upside.
US Dollar Index relevant levels
At the moment, the index is gaining 0.12% at 96.89 and a break above 97.80 (weekly high Jun.30) would aim for 97.87 (61.8% Fibo of the 2017-2018 drop) and finally 98.27 (200-day SMA). On the downside, the next support is located at 96.24 (monthly low Jul.9) seconded by 96.03 (50% Fibo of the 2017-2018 drop) and then 95.72 (monthly low Jun.10).