- DXY starts the week on a positive footing near the 93.30 region.
- Chicago Fed index, Fedspeak coming up next in the docket.
- Markets’ focus will be on Chief Powell’s testimonies later this week.
The US Dollar Index (DXY), which gauges the buck vs. a bundle of its main competitors, has reversed the initial pessimism and it now climbs to daily highs in the 93.30 region.
US Dollar Index looks to Powell, risk trends
The index is adding to Friday’s gains beyond 93.00 the figure, as market participants seem to favour the safe haven universe amidst the prevailing risk aversion mood at the beginning of the week.
Indeed, the selling sentiment among the riskier assets is sustaining the continuation of the recovery in the buck, which has the initial target at last week’s peaks in the 93.55/60 band (September 17).
Later in the day, the Chicago Fed National Activity Index will be the sole release seconded by the speech by FOMC’s L.Brainard (permanent voter, dovish). Moving forward, investors’ focus are expected to gyrate around the testimonies by Fed’s Powell on Tuesday, Wednesday and Thursday.
What to look for around USD
The dollar keeps the composure at the beginning of the week and looks to stabilize above the 93.00 yardstick. Occasional bullish attempts in DXY are seen as temporary, however, as the broad-based sentiment towards the greenback remains bearish. This view is reinforced by the “lower for longer” stance from the Federal Reserve, the unremitting advance of the coronavirus pandemic, the negative position in the speculative community and political uncertainty ahead of the November elections.
US Dollar Index relevant levels
At the moment, the index is gaining 0.30% at 93.28 and a break above 93.66 (monthly high Sep.9) would open the door to 93.99 (monthly high Aug.3) and finally 94.20 (38.2% Fibo of the 2017-2018 drop). On the other hand, the next support emerges at 92.70 (weekly low Sep.10) seconded by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.75 (2020 low Sep.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. 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.