US Dollar Index trims gains, back near 93.50 ahead of data
- 11th August 2020
- Posted by: Hakeem
- Category: FOREX LATEST NEWS DAILY
- DXY meets resistance around 93.70 at the beginning of the week.
- US fiscal stimulus bills still stuck among discussions.
- NFIB Index, Producer Prices next of relevance in the docket.
The greenback, when tracked by the US Dollar Index (DXY), is trading slightly on the defensive in the mid-93.00s following the closing bell in the Asian markets.
US Dollar Index looks to politics, US-China tensions
The index is now giving away part of the recent gains following two consecutive daily advances, while the rebound from last week’s YTD lows near 92.50 appears to have met resistance the 93.70 region.
In the meantime, market participants continue to look to the US political scenario, where Republicans and Democrats are still debating a new fiscal stimulus package to counteract the impact of the coronavirus on the economy.
What to look for around USD
The dollar managed to leave behind the area of +2-year lows near 92.50 in the second half of last week, managing to reclaim the area well above 93.00 afterwards. Occasional bullish attempts, however, appears to have run out of favour in the 94.00 region (August 3). Looking at the broader picture, investors keep the bearish stance on the dollar unchanged against the usual backdrop of a dovish Fed, the unabated advance of the pandemic and somewhat diminishing momentum in the economic recovery, while renewed US-China effervescence appears to have lent some oxygen to the currency as of late. On another front, the speculative community remained well into the negative territory for yet another week, supporting the view that a more serious bearish trend could be shaping up around the dollar.
US Dollar Index relevant levels
At the moment, the index is losing 0.09% at 93.53 and faces the next support at 92.52 (2020 low Aug.6) seconded by 91.80 (monthly low May 18) and finally 89.23 (monthly low April 2018). On the other hand, a break above 93.99 (weekly high Aug.3) would target 94.20 (38.2% Fibo of the 2017-2018 drop) en route to 96.03 (50% Fibo of the 2017-2018 drop).