- DXY pushes higher and targets the 97.00 handle.
- Fresh rumours sparked concerns on the US-China trade front.
- ISM Non-Manufacturing coming up next on the docket.
The greenback, in terms of the US Dollar Index (DXY), is now picking up further traction and is approaching the key 97.00 region.
US Dollar Index bid ahead of key data
The index has gathered further steam on Tuesday on the back of the renewed selling bias in its main rivals, namely the euro, the sterling and the Japanese yen.
In addition, geopolitical concerns surrounding the US-Iran conflict have subsided somewhat in past hours and have also lent extra support to the buck while at the same time bolstered the rebound in US yields.
On another direction, latest news highlighted the fact that China would be in no hurry to sign the so-called ‘Phase One’ deal. It is worth recalling that both countries expect to sign the agreement at some point next week.
In the data space, US trade deficit shrunk to $43.10 billion during November, bettering consensus. Later in the day, all the attention will be on the release of December’s ISM Non-Manufacturing seconded by Factory Orders for the month of November. In addition, the American Petroleum Institute (API) will release its weekly report on US crude oil supplies.
What to look for around USD
The index has rebounded from 5-month lows near 96.30, although it failed to extend the recovery further north of the 97.00 barrier on a sustainable basis for the time being. In the meantime, geopolitics – with US and Iran in centre stage – keeps stealing the show seconded by the imminent sign of the ‘Phase One’ deal with China. Despite the outlook on the buck looks dented following the recent weakness, its constructive view remains unaltered in the longer run, always underpinned by the so far ‘wait-and-see’ stance from the Fed vs. the broad-based dovish view from its G10 peers, the dollar’s safe haven appeal and its status of ‘global reserve currency’.
US Dollar Index relevant levels
At the moment, the index is gaining 0.32% at 96.94 and a break above 97.13 (21-day SMA) would open the door to 97.68 (200-day SMA) and finally 97.87 (61.8% Fibo of the 2017-2018 drop). On the downside, immediate support aligns at 96.36 (monthly low Dec.31) seconded by 96.04 (50% Fibo of the 2017-2018 drop) and then 95.84 (monthly low Jun.25 2019).
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.