US Dollar Index extend the consolidation below 97.70

DXY remains sidelined below the 200-day SMA.
Yields of the 10-year note rebound and approach 1.80%.
Existing Home Sales, Chicago Fed index expected later.

Pablo Piovano FXStreet

The greenback is prolonging the sidelined trading in the middle of the week, taking the US Dollar Index (DXY) to the 97.60 region.

DXY still capped by the 200-day SMA

The index keeps struggling for direction in the upper end of the weekly range, near 2020 highs although a breakout of the critical 200-day SMA in the 97.70 region still looks elusive.

In the meantime, risk appetite trends continue to alternate along with developments from the recent outbreak of the Chinese Whuan coronavirus and the first confirmed case in the US (Seattle).

On the trade front, President Trump said at his speech at the World Economic Forum in Davos on Wednesday that the relationship with China ‘has never been better’, at the same time suggesting that negotiations for the ‘Phase 2’ deal could start soon. Still with Trump, he stressed that the US could impose tariffs to EU cars if both parties fail to clinch a deal.

Later in the NA session, the Chicago Fed Activity Index is due seconded by the more relevant Existing Home Sales for the month of December.

What to look for around USD

DXY keeps the weekly rangebound theme unchanged for the time being, and still targets the key 200-day SMA in the 97.70 zone. In the meantime, news from the Chinese coronavirus and uncertainty regarding the US-China ‘Phase 2’ deal underpin bouts of risk aversion and maintain the buck under some pressure. On another scenario, the index should regain the constructive view above the 200-day SMA, always supported by the current ‘wait-and-see’ stance from the Fed (confirmed once again at the latest FOMC minutes) vs. the broad-based dovish view from its G10 peers, the dollar’s safe haven appeal and its status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the index is gaining 0.02% at 97.62 and a breakout of 97.73 (2020 high Jan.20) would open the door to 97.87 (61.8% Fibo of the 2017-2018 drop) and then 98.54 (monthly high Nov.29 2019). On the other hand, the next support emerges at 97.09 (weekly low Jan.16) followed by 96.36 (monthly low Dec.31) and finally 96.04 (50% Fibo of the 2017-2018 drop).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.