US Dollar Index remains under pressure near 96.00 ahead of US CPI, FOMC
- 10th June 2020
- Posted by: Hakeem
- Category: FOREX LATEST NEWS DAILY, FOREX MARKET ANALYSIS, TECHNICAL ANALYSIS
- DXY comes under extra pressure and approaches 96.00.
- US inflation figures coming up next on the docket.
- The Fed is expected to leave rates unchanged at the meeting.
The greenback remains well on the defensive so far this week and is now trading in levels close to the key support at 96.00 the figure when tracked by the US Dollar Index (DXY).
US Dollar Index now looks to data, Fed
The index extends the leg lower for the fourth week in a row so far on Wednesday, accelerating the downside following the breakdown of the 2019-2020 line, today near 97.00, and the 200-week SMA in the 96.40 region.
As usual, the solid sentiment in the risk associated complex keeps the buck under heavy pressure, always amidst the ongoing progress surrounding the re-opening of the economy along with easing lockdown restrictions around the world.
Later in the US calendar, the focus of attention will be on the release of inflation figures measured by the CPI for the month of May. Moving forward, the FOMC event should grab all the attention. In fact, the Federal Reserve is expected to leave rates unchanged, while the announcement of further stimulus is not ruled out. In addition, investors will closely follow the press conference by Chief Powell as well as the publication of new economic projections (“dots plot”).
What to look for around USD
The greenback intensifies the downside so far this week, and it is now trading at shouting distance from the key support at 96.00 the figure. As usual in past weeks, price action around the dollar is expected to keep tracking the performance of the broad risk appetite trends, US-China trade developments and the progress on 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 0.17% at 96.23 and faces the next support at 96.11 (monthly low Jun.10) followed by 96.03 (50% Fibo of the 2017-2018) drop and then 94.65 (2020 low Mar.9). On the other hand, a breakout of 97.87 (61.8% Fibo of the 2017-2018 drop) would aim for 98.44 (200-day SMA) and finally 98.99 (100-day SMA).