- DXY is putting the key 100.00 support to the test on Monday.
- Risk-on sentiment surges along with news of a potential vaccine.
- Powell’ testimony, FOMC minutes, Claims take centre stage this week.
The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, has come under strong selling pressure and trades in fresh lows in sub-100.00 levels.
US Dollar Index offered on risk-on mood
The index breaches the key support at 100.00 the figure at the beginning of the week, slipping back to new 3-day lows on the back of the strong improvement in the risk-associated universe.
In fact, riskier assets have left behind the initial pessimism after biotech company Moderna Inc. said initial vaccine results were positive following tests to 45 participants, all of them showing the production of antibodies to the coronavirus.
Adding to the better tone in the risk complex, Chinese demand for crude oil continues to give signs of recovering, motivating prices of the commodity to extend the rally to the vicinity of $35.00 mark and $32.00 mark per barrel of the Brent crude and the West Texas Intermediate, respectively.
What to look for around USD
The greenback has started the week on a cautious note, always vigilant on the US-China trade front and the gradual return to some normality in the US economy. Supporting the momentum around the greenback emerges the current “flight-to-safety” environment, helped by its status of global reserve currency and store of value. The dollar has also derived extra support after Fed’s J.Powell ruled out negative rates at his recent testimony.
US Dollar Index relevant levels
At the moment, the index is losing 0.33% at 100.03 and faces the next support at 99.49 (55-day SMA) followed by 99.12 (weekly low May 11) and then 98.57 (monthly low May 4). On the flip side, a breakout of 100.93 (weekly/monthly high Apr.6) would open the door to 101.34 (monthly high Apr.10 2017) and finally 102.25 (monthly high Mar.9 2017).
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.