USD Index breaks below 106.00 to clinch new multi-session lows
|- The index adds to the weekly pullback and breaches 106.00.
- US markets will be closed due to the Thanksgiving Day holiday.
- The dollar remains depressed following FOMC Minutes.
The greenback loses ground for the third session in a row and breaks below the 106.00 support when gauged by the USD Index (DXY).
USD Index looks offered post-Minutes
The index trades in multi-day lows in the sub-106.00 zone amidst the tenacious improvement in the risk-associated universe and already approaches the November low near 105.30, just ahead of the critical 200-day SMA, today at 105.27.
In the meantime, the dollar remains offered in the current post-FOMC Minutes context, where participants agreed that a slower pace of future interest rate hikes could be appropriate to better assess the progress of the ongoing normalization of the Fed’s monetary conditions.
It is worth recalling, however, that FOMC members still see the ultimate level of the interest rates higher than previously thought.
What to look for around USD
The dollar extends the pronounced drop from Monday’s peaks around the108.00 barrier and already trades in the area below the 106.00 yardstick pari passu with the persistent recovery in the risk-linked galaxy.
While hawkish Fedspeak maintains the Fed’s pivot narrative in the freezer, upcoming results in US fundamentals would likely play a key role in determining the chances of a slower pace of the Fed’s normalization process in the short term.
Key events in the US this week: Thanksgiving Day holiday (Thursday).
Eminent issues on the back boiler: Hard/soft/softish? landing of the US economy. Prospects for further rate hikes by the Federal Reserve vs. speculation of a recession in the next months. Fed’s pivot. Geopolitical effervescence vs. Russia and China. US-China persistent trade conflict.
USD Index relevant levels
Now, the index is retreating 0.15% at 105.94 and the breakdown of 105.34 (monthly low November 15) would open the door to 105.27 (200-day SMA) and finally 104.63 (monthly low August 10). On the other hand, the next up barrier comes at 107.99 (weekly high November 21) followed by 109.16 (100-day SMA) and then 110.55 (55-day SMA).
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.