US Dollar Index offered below 98.00, looks to trade
|- DXY comes under pressure below the 98.00 mark.
- US-China trade deal remains in centre stage.
- FOMC minutes, Philly Fed index, U-Mich gauge next of relevance.
The greenback, in terms of the US Dollar Index (DXY), is extending the downside and breaks below the key support at 98.00 the figure.
US Dollar Index in 2-week lows
The index has started the week on the negative footing, extending the downside for the fourth consecutive session to levels below the 98.00 handle.
Markets participants remain optimistic on a positive outcome from the US-China ‘Phase One’ deal and this is sustaining the still upbeat sentiment in the risk-associated complex.
In addition, mixed results from the US docket as of late have somewhat tempered the rally in the buck and dragged US yields lower, all forcing DXY to correct lower from last week’s tops in the boundaries of 98.50.
Moving forward, the FOMC minutes (Wednesday), the key Philly Fed (Thursday) and the final U-Mich index (Friday) will be the salient events later in the week.
What to look for around USD
The index seems to have charted a short-term top in the 98.50 region for the time being. In the meantime, headlines from the US-China trade dispute are expected to remain as the exclusive driver when comes to price action in the global markets. Other than that, investors stay focused on the recent US results in key fundamentals amidst declining yields and the steepening of the 2y-10y yield curve seen as of late. Moving to US politics, markets keep ignoring the Trump’s impeachment developments, while the impact on the FX space remains muted. On the broader view, however, the outlook on the greenback still looks constructive on the back of the Fed’s ‘wait-and-see’ mode vs. the dovish stance from its G10 peers, the dollar’s safe haven appeal and the status of ‘global reserve currency’.
US Dollar Index relevant levels
At the moment, the pair is losing 0.06% at 97.94 and faces immediate contention at 97.81 (21-day SMA) seconded by 97.55 (200-day SMA) and finally 97.11 (monthly low Nov.1). On the flip side, a breakout of 98.45 (monthly high Nov.13) would open the door to 99.25 (high Oct.8) and then 99.67 (2019 high Oct.1).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.