US Dollar Index clings to gains around 97.20 ahead of data


  • DXY reverses recent losses near 97.20.
  • Next target at the 200-day SMA above 97.40.
  • Factory Orders, Durable Goods Orders next on the docket.

The US Dollar Index (DXY), which gauges the buck vs. a basket of its main competitors, is posting decent gains at the beginning of the week in the 97.20/25 band.

US Dollar Index looks to data

After five consecutive daily pullbacks, the index appears to have found some strong support in the boundaries of the 97.00 neighbourhood, or multi-month lows.

Increasing optimism in the risk-associated space following Brexit headlines and some positive news on the US-China trade front have been weighing on the Greenback in past sessions and forced DXY to resume the downside and refocus on the key 97.00 support.

Later in the session, September’s Durable Goods Orders and Factory Orders will be in the limelight followed by the speech by San Francisco Fed M.Daly (2021 voter, centrist).

What to look for around USD

DXY came under extra downside pressure despite the Fed’s ‘hawkish cut’ last week. The Fed is now expected to remain vigilant mainly on the global scenario, where trade concerns and the impact on global growth remain in centre stage amidst some loss of momentum in the domestic economy. On the broader view, the constructive outlook in DXY looks a bit damaged but it still is in play as the Fed moves into an impasse 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 gaining 0.10% at 97.22 and a break above 97.44 (200-day SMA) would aim for 98.00 (high Oct.30) and finally 98.28 (55-day SMA). On the downside, immediate contention aligns at 97.11 (monthly low Nov.1) seconded by 97.03 (monthly low Aug.9) and then 96.67 (low Jul.18).

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