US Dollar Index clings to gains near 97.50 ahead of data


  • DXY extends the gradual upside to the vicinity of 97.50.
  • Markets’ attention remains on coronavirus and re-opening of the economy.
  • PCE, Personal Income/Spending, final U-Mich next on the docket.

The greenback, when gauged by the US Dollar Index (DXY), is extending the upside momentum to the 97.50 region at the end of the week.

US Dollar Index targets the 97.90 area

The index is up for the third session in a row on Friday, prolonging the bullish bias seen in the second half of the week on the back of renewed demand for the safe haven universe.

In fact, concerns around the advance of the coronavirus and uncertainty surrounding the re-opening of the economy continue to support the investors’ preference for the buck in a context dominated by the risk-aversion. In addition, swelling effervescence around the trade scenario has been also collaborating with the broad risk-off sentiment in past sessions as well as the absence of improvement in the labour market.

Later in the NA session, inflation figures measured by the PCE for the month of May are due seconded by Personal Income/Spending during the same period and the final June gauge of the Consumer Sentiment gauged by the U-Mich index.

What to look for around USD

The re-emergence of the risk aversion in response to COVID-19 developments and trade jitters have lent extra support to the dollar in the last couple of sessions. In the meantime, price action around the buck is expected to track the performance of the broad risk appetite trends, US-China trade developments and the (lack of) progress of the re-opening of the economy. On the constructive stance around the buck, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value.

US Dollar Index relevant levels

At the moment, the index is up 0.05% at 97.43 and a break above 97.74 (weekly high Jun.22) would aim for 97.87 (61.8% Fibo of the 2017-2018 drop) and finally 98.36 (200-day SMA). On the flip side, immediate contention is located at 96.39 (weekly low Jun.23) seconded by 96.03 950% Fibo of the 2017-2018 drop) and finally 95.72 (monthly low Jun.10).

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