US Dollar Index clings to gains around 100.00 ahead of key data

  • DXY struggles for direction around the 100.00 mark on Tuesday.
  • Investors’ focus remains on the potential re-opening of the economy.
  • Consumer Confidence, Trade Balance take centre stage on Tuesday.

The greenback, tracked by the US Dollar Index (DXY), has regained the 100.00 neighbourhood in the first half of the week.

US Dollar Index looks to data, risk trends

The index is looking to reverse the negative start of the week on a sustainable fashion, managing to retake the 100.00 mark and slightly above amidst alternating risk appetite trends.

In fact, the risk-on mood returned to the markets on Monday, forcing the dollar to recede further and breach the key barrier at 100.00 the figure, testing at the same time fresh lows in the 99.85/80 band. The improvement in the riskier assets also saw US yields edging higher to the 0.67% area and stocks keeping the positive ground despite the crude oil rout.

Later in the NA session, the focus of attention will be on the publication of the Consumer Confidence measured by the Conference Board, seconded in relevance by the Trade Balance figures. It is worth mentioning that the 2-day FOMC’s meeting kicks in today.

What to look for around USD

The dollar’s rally lost momentum once again in the vicinity of 101.00, where sellers re-emerged and pushed DXY back to the 100.00 mark and below, where it is now looking to consolidate. In the meantime, all the attention remains on the coronavirus developments against the backdrop of increasing efforts by the country to re-open the economy, albeit at a gradual pace. On the supportive side of the dollar remains its status of “global reserve currency”, store of value and the investors’ preference when comes to seek refuge amidst financial stress.

US Dollar Index relevant levels

At the moment, the index is gaining 0.06% at 100.12 and a break above 100.93 (weekly/monthly high Apr.6) would aim for 101.34 (monthly high Apr.10 2017) and finally 103.65 (monthly high December 2016). On the flip side, the next support emerges at 99.85 (weekly low Apr.27) followed by 99.29 (55-day SMA) and then 98.82 (monthly low Apr.15).

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